US employers added 390,000 jobs, Utah economist says workforce participation is up
(CNN) — US employers added 390,000 jobs in May, representing a robust but slower pace of hiring, according to the Bureau of Labor Statistics’ monthly jobs report released Friday.
The unemployment rate stayed at 3.6%, slightly higher than the half-century low recorded in February 2020, before the pandemic hit.
While the number of jobs added was down from the revised total of 436,000 in April, it was better than many were forecasting. The consensus of economists surveyed by Reuters had been for a gain of 325,000 jobs. And while the unemployment rate did not fall to 3.5% as predicted, it remained at a level considered to be full employment by many economists.
Zions Bank Senior Economist Robert Spendlove said his review of the numbers found that more people in the U.S. are getting off the sidelines, and getting to work.
“The labor participation rate, so the number of people in the population that are working or looking for work, went up a little,” Spendlove said.
“It went up to 62.3%.”
Spendlove said this increase is promising, as employers have needed more people entering the workforce. And depending on what they’re looking for, Spendlove said the jobs are out there.
“Right now, there’s around two jobs for every unemployed person,” he said. That information comes from a separate Labor Department survey.
Fears of a recession continue
The report comes at a time when fears of a recession are rising, partly because the Federal Reserve is in the process of raising interest rates to try to tame inflation. Higher rates can cause businesses to pull back on expansion and investment plans, including hiring.
The job gains were widespread, with 69% of the industries tracked by the Labor Department adding workers. The major exception was in retail, the nation’s largest sector in terms of jobs. In May, there was a net loss of 60,700 retail jobs, according to the report.
Automakers and their parts suppliers also lost 3,500 jobs as plants had to temporarily shut down or eliminate shifts due to a shortage of computer chips and other materials needed to build cars and trucks.
The biggest job gains came in the leisure and hospitality sector, which added 84,000 jobs in anticipation of a strong summer travel season, due to pent-up demand from people wanting to go on vacation.
The shortage of available workers helped to raise average wages in Friday’s jobs report. The average hourly wage of $31.95 was up 5.2% compared to a year ago. But that was slightly lower than the rate of increase in five of the last seven months. And it’s less than the pace of price increases being paid by consumers for everything from gas to groceries, meaning the larger paychecks are not keeping up with inflation.
This story will be updated.
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