A worker manipulates a cask of molten iron during cookware production at the Lodge Manufacturing Co. factory in South Pittsburg, Tennessee, March 7, 2022.
Luke Sharrett | Bloomberg | Getty Images
The U.S. economy added 390,000 jobs in May, better than expected despite fears of an economic slowdown and with a roaring pace of inflation, the Bureau of Labor Statistics reported Friday.
At the same time, the unemployment rate held at 3.6%, just above the lowest level since December 1969.
Economists surveyed by Dow Jones had been looking for nonfarm payrolls to expand by 328,000 and the unemployment rate to edge lower to 3.5%.
“Despite the slight cooldown, the tight labor market is clearly sticking around and is shrugging off fears of a downturn,” said Daniel Zhao, Glassdoor’s senior economist. “We continue to see signs of a healthy and competitive job market, with no signs of stepping on the brakes yet.”
Average hourly earnings increased 0.3% from April, slightly lower than the 0.4% estimate. The year-over-year increase for wages of 5.2% was in line with expectations.
Stock market futures were volatile and pointed to a lower open on Wall Street following the report. Government bond yields moved higher.
Job gains were broad-based. Leisure and hospitality led, adding 84,000 positions. Professional and business services rose by 75,000, transportation and warehousing contributed 47,000, and construction jobs increased by 36,000.
Other areas that saw notable gains included state government education (36,000), private education (33,000), health care (28,000), manufacturing (18,000) and wholesale trade (14,000).
Retail trade took a hit on the month, however, losing 61,000 in May, though the BLS noted that the sector remains 159,000 above its February 2020 pre-pandemic level.
Despite the job gains, the BLS household survey showed that the labor market has yet to recover all the positions lost during the pandemic. Total employment remains 440,000 below the pre-Covid level.
Labor force participation edged higher, rising to 62.3% though still 1.1 percentage points below February 2020, as the labor force is smaller by 207,000 from that mark.
A more encompassing measure of unemployment that takes into account those not looking for jobs and those holding part-time positions for economic reasons moved higher to 7.1%, up one-tenth of a percentage point from April. Unemployment for Asians fell to 2.4%, the lowest in nearly three years, while the rate for Blacks was 6.2%, an increase of 0.3 percentage points.
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