Considerable spikes in employment characterized the U.S. economy in May – more than enough to offset an April jobs report viewed as underwhelming in numerous respects. According to the latest Employment Situation Summary from the Bureau of Labor Statistics, nonfarm payroll employment in America rose by 223,000 through May. This was nearly 100,000 more than the 159,000 positions created during April (according to revised figures) and ahead of numerous economic analysts surveyed by both Bloomberg and Reuters, who predicted median gains of 190,000 and 188,000 jobs, respectively.
Additionally, the unemployment rate fell to 3.8 percent from the previous month, which, at 3.9 percent in April, was the lowest rate seen in almost 20 years. May’s figure represents an almost half-century low.
Retail trade, the dependably robust field of healthcare and construction led the way for job increases, respectively gaining 31,000, 29,000 and 25,000 jobs in May.
Professional and technical services added 23,000 positions for the month, transportation and warehousing created 19,000 jobs and manufacturing continued its trend of expansion driven by durable goods production, with 18,000 roles added to its ranks. Mining brought up the rear in terms of statistically significant employment gains for May, creating 6,000 new positions largely in the niche of support services.
Job growth in other industries such as wholesale trade, information, financial activities, leisure and hospitality, and government was relatively unchanged.
Other indicators within the May BLS report, such as wage growth, provided stronger evidence of sustainable expansion than what were seen in April. Average hourly earnings increased 8 cents to reach $26.92, representing a 0.3 percent uptick that outshone April’s 0.1 percent jump. Additionally, while April’s decline in the labor force participation rate – to 62.7 percent from 62.8 – made it clear that some of 2018’s earlier unemployment decline came from people who stopped actively looking for work, May had no movement in this metric, indicating that the U.S. gained at least enough positions for labor force participation to break even.
Michael Feroli, the chief U.S. economist at JPMorgan Chase & Co., provided a balanced examination of the employment report’s conclusions in an interview with Bloomberg.
“Demand for labor remains pretty vigorous,” Feroli told the news provider. “There isn’t a whole lot to dislike in this report.” He then admitted that the rate of expansion was likely too strong to continue quite as it had, saying, “Job growth is running in excess of the sustainable pace of the demographically determined supply of labor. This report, in and of itself, definitely strengthens the case for four hikes by the [Federal Reserve] this year. The question is, will policymakers have the confidence that global developments won’t adversely affect U.S. growth?”
In its direct statements, the Fed remains noncommittal thus far regarding the specific schedule of federal benchmark interest rate hikes, but Feroli’s opinion echoes the belief of many on Wall Street and the broader American financial sector who expect three more increases by 2018’s end. Current inflation stands just below 2 percent, the desired level for the national bank, according to Reuters.
The White House’s controversial imposition of metals tariffs on previously exempt trade partners including Canada, Mexico and the European Union, as well as other global socioeconomic unrest, could be problematic in the near future for the U.S. Yet at present, American domestic labor occupies an undeniably strong position based on the latest numbers.