The United States labor market sent another sign of strength and during May the non-agricultural payroll added 272 thousand jobsfrom 165,000 jobs created during April, according to the Bureau of Labor Statistics (BLS)
The May figure was well above market expectationswhich pointed to the creation of 180 thousand jobs, 90 thousand positions below what was published this Friday.
“Total nonfarm payroll employment increased by 272,000 in May, more than the average monthly increase of 232,000 over the previous 12 months. In May, employment continued with an upward trend in several industries, led by healthcare; government; recreation and hospitality; and professional, scientific and technical services,” highlighted the BLS.
In which sectors were the most jobs created in the US?
In the health sector 68 thousand jobs were added; in government, 43 thousand; in recreation and hospitality42 thousand and in professional services32 thousand jobs in May, compared to the previous month.
“Employment is likely to have received a boost in May due to favorable seasonal adjustment factors, a weather-related recovery and a longer period between reference weeks,” according to Oxford Economics.
The strength of the labor market represents an obstacle to the Fed’s ‘fight’ against inflation, as it suggests that with more people employed, consumption will continue to show resistanceso the interest rate could remain high to discourage purchases.
Another piece of information that shows strength in the labor market was that average hourly earnings of all employees on private nonfarm payrolls rose 14 cents, or 0.4 percent month-over-month to $34.91 in May, accelerating from 0.2 percent in April.
Over the past 12 months, average hourly earnings have increased 4.1 percent; In fact, in that period the annual rate averages 4.3 percent.
Job discrepancy
Although 272 thousand jobs were added in May in non-farm payrollthe household survey revealed a job loss of 408,000, bringing the unemployment rate up to 4 percent, from 3.9 percent in April.
It is the first time since January 2022 that the unemployment rate is at 4 percent, according to the BLS. At the end of May there were 6.6 million unemployed people.
“A year earlier, the unemployment rate was 3.7 percent and the number of unemployed was 6.1 million,” the Bureau said.
Nick Bunker, director of economic research at Indeed, noted that the household survey is less complicated than one might think at first glance.
“The entire decline in employment is due to workers 24 years old or younger. And the unemployment rate for this group skyrocketed by a full percentage point,” Bunker wrote on X’s account of him.
This population group had an unemployment rate of 9.2 percent in May, up from 8.2 percent in April.
“The May jobs report has something to please both Fed hawks and doves, but the new data does not justify any change to our forecast that the first rate cut will come in September, followed by another in December,” indicated Oxford Economics.
