Unemployment Steady at 3.6%; Employers Added 390,000 Jobs in May

Last month, employers added 390,000 jobs according to the Labor Department. That was the slowest pace of growth since April of 2021. Still, the May total was well above the average number of new jobs created in the 12 months to February 20202, when COVID-19 pandemic became widespread around the United States. The unemployment rate remained at 3.6%, slightly above where it stood before the pandemic became widespread in the United States in February 2020. Wages grew 5.2% on the year, down from 5.5% in April.

The labor force participation rate, which measures the share of the population working or looking for work ticked up to 62.3% from 62.2% in April, a sign that plentiful jobs and higher wages are slowly drawing people back to work. April’s job gains were revised up to 436,000 from 428,000. The job market is coming off an exceptional stretch in which demand vastly exceeded the number of available worked. Employers added more than 400,000 jobs a month for 12 consecutive months, the longest period of such strong employment growth in records dating back to 1939.

In April, there were 11.4 million job openings- a historically high number but down from 11.9 million in March. The number of job opening pre unemployed worked dipped slightly to 1.9 in April from 2 in March. Chief Executive officers have started boosting pay packing up to 40% to recruit talent over the past two years.

Economists point to three main reasons why labor-market pressure is starting to ease. First, the short supply of workers is constraining growth and causing businesses to scale down their expansion plans. A wave of retirements and resignations early in the pandemic has left employers scrambling to fill open jobs. Second, the Federal Reserve is pursuing an aggressive path of interest rate increases to curb inflation that has slowed growth in some sectors of the economy. Finally, historically high levels of inflation could lead consumers to pull back on spending, which would slow growth.

“Employers Added 390,000 Jobs in May; Unemployment Steady at 3.6%.” Edited by David Harrison, The Wall Street Journal, Dow Jones & Company, 3 June 2022, www.wsj.com/articles/may-jobs-report-unemployment-rate-2022-11654195243.

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