Strong Results Overshadow a Few Signs of Weakness
Jobs Growth
Following slower-than-expected growth in April (recently adjusted to 165,000 new jobs), jobs creation numbers surged ahead in May, reaching 272,000, well ahead of the 12-month average of 232,000.
Top Industries
May growth was broad-based and most evident in healthcare; government; leisure and hospitality; and professional, scientific and technical services.
Unemployment
The unemployment rate in May hit 4.0% for the first time in 27 months, although it was just slightly ahead of April’s 3.9% rate.
Wages
Compensation was another bright spot in the May report, edging up 0.4% and shifting average hourly wages up to 4.1% for the past 12-month period.
Work Week
There was no change in the average work week from April to May, remaining at 34.3 hours for both months.
Temporary Job Trends
Activity in the temporary jobs sector followed a continuing downward trend, recording a loss of 14,100 jobs in May.
What Does It All Mean?
Supporting a strong jobs market, hiring activity and rising compensation in May offer a good news/bad news outlook. Robust jobs creation, coupled with wages that exceed the level of inflation, signal a strong economy. These factors also mean the Federal Reserve will likely not lower interest rates any time soon, as it continues a tricky balancing act designed to avoid recession while managing inflation.
Noteworthy findings in the May report include a slightly lower labor participation rate, but with rising participation in the labor market by women, which had fallen off due to the pandemic. Other recent trends that add color to the monthly jobs report: the salary gains that typically accompany job switches have dipped below 8% and
are the lowest they have been in three years; the job quits rate is holding at pre-pandemic levels, while the number of new job openings in the past month is down. There are still 8.6 million unfilled jobs in the nation, however, although the number of job openings per job seeker is at the lowest level in three years.
All of this may paint a changing picture of employment, with ongoing shifts in skills availability and motivation about mobility, but it is one that offers continuing challenges to secure the right talent amid continuing opportunities to build a strong, increasingly productive workforce.
Sources: U.S. Bureau of Labor Statistics (BLS), NBC News, Staffing Industry Analysts, FOX News, CNN, ABC News, Reuters, The Washington Post.
