In an impressive show of resilience, U.S. employers created 172,000 new jobs in May, far exceeding analysts’ expectations, signaling a robust labor market even amid inflationary pressures and fears of a slowdown in economic expansion. Read more about it here.
By the numbers
Analysts surveyed by FactSet had anticipated a more modest increase of 105,000 jobs for the month of May.
This employment report follows two consecutive months of notable job growth. The Labor Department announced on Friday that job gains for March and April have been revised upwards, now totaling 214,000 and 179,000 respectively.
The unemployment rate remained steady in May at 4.3%, holding the same level as in April.
The leisure and hospitality sector was the primary driver of this job surge, contributing 70,000 positions, well above its average monthly increase of 14,000 over the past year. Local government employment also rose significantly, with an addition of 55,000 jobs. Meanwhile, the healthcare sector, which has historically led in employment growth, expanded by 35,000 jobs in May.
Employers added an average of nearly 190,000 jobs per month from March to May, compared with an average monthly loss of approximately 4,300 jobs from December to February.
“This is a blowout jobs report,” said Olu Sonola, head of U.S. economics at Fitch Ratings, in an email. “Hiring remains narrow, but the headline strength is enough to keep the Fed focused on inflation. With inflation already accelerating, the bigger risk is rising price pressure — not a sustained weakening in labor demand.”
Sonola added, “That makes it much harder to argue for lower interest rates anytime soon.”
While hiring was robust, wage growth is lagging behind inflation. Average hourly earnings were 3.4% in May, below April’s 3.8% annual inflation rate.
