Mon | Jul 15, 2024

US employers added a surprisingly strong 339,000 jobs in May

Published:Friday | June 2, 2023 | 9:42 AM
Women work in a restaurant kitchen in Chicago, Thursday, March 23, 2023. On Friday, the US government issues the May jobs report. The labour market has added jobs at a steady clip in the past year, despite efforts by the Federal Reserve to cool the economy and bring down inflation. (AP Photo/Nam Y. Huh, File)

WASHINGTON (AP) — The nation's employers stepped up their hiring in May, adding a robust 339,000 jobs, well above expectations and evidence of enduring strength in an economy that the Federal Reserve is desperately trying to cool.

Friday's report from the government reflected the job market's resilience after more than a year of rapid interest rate increases by the Fed. Many industries, from construction to restaurants to health care, are still adding jobs to keep up with consumer demand and restore their workforces to pre-pandemic levels.

Yet there were some mixed messages in the jobs figures, which also showed that the unemployment rate rose to 3.7 per cent, from a five-decade low of 3.4 per cent in April. The government compiles the unemployment data with a different survey than the one used to calculate job gains. The two surveys can sometimes conflict.

The length of the average work week also declined, and wage growth cooled, resulting in a jobs report that economists said painted an unusually complicated picture of the employment market. Still, the overall picture was an encouraging one.

“Job growth remains robust in what is undeniably a historically tight labour market,” said Joe Brusuelas, chief economist at consulting firm RSM. “As long as the economy continues to produce above 200,000 jobs per month this economy simply is not going to slip into recession.”

In Friday's report, the government sharply revised up its estimate of job growth in March and April by an additional 93,000 jobs, underscoring the labour market's durability.

Average hourly pay rose 11 cents to $33.44, up 4.3 per cent from a year ago. Wages continue to grow faster than the 3 per cent annual pace before the pandemic but are down from a nearly 6 per cent rate last year.

Even with the huge job gain, the slowdown in wages and shorter work week are likely enough to keep the Fed from raising its key interest rate at its next meeting later this month, economists said. Having imposed 10 straight rate hikes since March 2022, the Fed is widely expected to skip a rate increase when it meets later this month, though it may resume its increases after that.

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