Hiring was unexpectedly robust in May, with a gain of 272,000 jobs, but it wasn’t all good news: The unemployment rate ticked up, to 4 percent.
The U.S. economy keeps throwing curveballs, and the May employment report is the latest example.
Employers added 272,000 jobs last month, the Labor Department reported on Friday, well above what economists had expected as hiring had gradually slowed. That’s an increase from the 232,000-job average over the previous 12 months, scrambling the picture of an economy that’s relaxing into a more sustainable pace.
Most concerning for the Federal Reserve, which meets next week and again in July, wages rose 4.1 percent from a year ago — a sign that inflation might not yet be vanquished.
“For those who may have thought they would see a July rate cut, that door has largely been shut,” said Beth Ann Bovino, chief U.S. economist for U.S. Bank. Although wage gains are good for workers, she noted, persistent price increases undermine their spending power.
Stocks fell shortly after the report was published, then recovered most of their losses by the end of the day. Government bond yields, which track expectations for Fed rate moves, rose sharply and remained elevated through the trading day.
Wage growth ticked up in May
Year-over-year percentage change in earnings vs. inflation
0
+2
+4
+6
+8%
2019
2020
2021
2022
2023
2024
+4.1%
in May
+3.4%
in April
Consumer Price Index
Avg. hourly earnings
But the portrait of an accelerating labor market isn’t perfectly clear, either. In another part of the report, the unemployment rate ticked up to 4 percent, its highest point since January 2022. That number is drawn from a survey of households, which showed essentially no employment growth for the past year and rising part-time employment that had displaced full-time positions.
The education and health sector gained the most jobs
Change in jobs in May 2024, by sector
Education and health
+86,000 jobs
Government
+43,000
Leisure and hospitality
+42,000
Business services
+33,000
Construction
+21,000
Retail
+12,600
Manufacturing
+8,000
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Source: Economy - nytimes.com