Please ensure Javascript is enabled for purposes of website accessibility
US Employers Add 272,000 Jobs in May, Signaling Economic Health
gvw_ap_news
By Associated Press
Published 4 weeks ago on
June 7, 2024

U.S. employers added 272,000 jobs in May, reflecting steady economic growth despite high interest rates and rising wages, though the unemployment rate edged up to 4%, hinting at a potential slowdown. (AP File)

Share

Getting your Trinity Audio player ready...

WASHINGTON — America’s employers added a strong 272,000 jobs in May, accelerating from April and a sign that companies are still confident enough in the economy to keep hiring despite persistently high interest rates.

Economy is Growing Steadily

Last month’s sizable job gain suggests that the economy is still growing steadily, propelled by consumer spending on travel, entertainment and other services. U.S. airports, for example, reported record traffic over the Memorial Day weekend. A healthy job market typically drives consumer spending, the economy’s principal fuel. Though some recent signs had raised concerns about economic weakness, May’s jobs report should help assuage those fears.

Still, Friday’s report from the government included some signs of a potential slowdown. The unemployment rate, for example, edged up for a second straight month, to a still-low 4%, from 3.9%, ending a 27-month streak of unemployment below 4%. That streak had matched the longest such run since the late 1960s.

President Joe Biden is still likely to point to Friday’s jobs report as a sign of the economy’s robust health under his administration. The presumptive Republican nominee, Donald Trump has focused his criticism of Biden’s economic policies on the surge in inflation, which polls show still weighs heavily in voters’ assessment of the economy.

Hourly Paychecks on the Rise

Hourly paychecks accelerated last month, a welcome gain for workers though one that could contribute to stickier inflation. Hourly wages rose 4.1% from a year ago, faster than the rate of inflation and more quickly than in April. Some companies may raise their prices to offset their higher wage costs.

The Federal Reserve’s inflation fighters would like to see the economy cool a bit as they consider when to begin cutting their benchmark rate. The Fed sharply raised interest rates in 2022 and 2023 after the vigorous recovery from the pandemic recession ignited the worst inflation in 40 years.

Friday’s report will likely underscore Fed officials’ intention to delay any cuts to their benchmark interest rate while they monitor inflation and economic data. Though Chair Jerome Powell has said he expects inflation to continue to ease, he has stressed that the Fed’s policymakers need “greater confidence” that inflation will fall back to their 2% target before they would reduce borrowing costs. Annual inflation has declined to 2.7% by the Fed’s preferred measure, from a peak above 7% in 2022.

“This report is going to complicate the Fed’s job,” said Julia Pollak, chief economist for ZipRecruiter. “No one’s getting those very clear signals that they were hoping for that a rate cut is appropriate in July or September.”

Last month’s hiring occurred broadly across most of the economy. But job growth was particularly robust in health care, which added 84,000 jobs, and restaurants, hotels, and entertainment providers, which gained 42,000.

Governments Add 43,000 Jobs

Governments, particularly local governments, added 43,000 positions. Professional and business services, which includes managers, architects and information technology, grew by 33,000.

One potential sign of weakness in the May employment report was a drop in the proportion of Americans who either have a job or are looking for one; it fell from 62.7% to 62.5%. Most of that drop occurred among people 55 and over, many of whom are baby boomers who are retiring.

A surge in immigration in the past three years has boosted the size of the U.S. workforce and has been a key driver of the healthy pace of job growth. (Economists have said it isn’t clear whether the government’s jobs report is picking up all those gains, particularly among unauthorized immigrants.)

When the Fed began aggressively raising rates, most economists had expected the resulting jump in borrowing costs to drive unemployment to painfully high levels and cause a recession. Yet the job market has proved more durable than almost anyone had predicted. Even so, Americans remain generally frustrated by high prices, a continuing source of discontent that could imperil Biden’s re-election bid.

The economy expanded at just a 1.3% annual rate in the first three months of this year, the government said last week, a sharp pullback from the 3.4% pace in last year’s final quarter. Much of the slowdown, though, reflected reduced stockpiling by businesses and other volatile factors, while consumer and business spending made clear that demand remained solid.

In April, though, consumer spending, adjusted for inflation, declined. That raised concern among economists that elevated inflation and interest rates are increasingly pressuring some consumers, particularly younger and lower-income households.

A key reason why the economy is still producing solid net job growth is that layoffs remain at historic lows. Just 1.5 million people lost jobs in April. That’s the lowest monthly figure on record — outside of the peak pandemic period — in data going back 24 years. After struggling to fill jobs for several years, most employers are reluctant to lay off workers.

RELATED TOPICS:

DON'T MISS

Steve McQueen, a 1912 Indian, and Dan and Kathy Rouit’s Clovis Flat Track Motorcycle Museum

DON'T MISS

US Job Openings Rise to 8.1 Million Despite Higher Interest Rates

DON'T MISS

Supreme Court Sidesteps Several New Gun Cases, Including Challenge to State Assault Weapons Ban

DON'T MISS

Trump Says He Can End the Russia-Ukraine War in One Day. Russia’s UN Ambassador Says He Can’t

DON'T MISS

Defense Secretary Austin Says the US Will Provide $2.3 Billion More in Military Aid to Ukraine

DON'T MISS

California Legislature Makes a Flurry of Big Changes to November Ballot Measures

DON'T MISS

Beryl Heads Toward Jamaica as a Major Hurricane After Ripping Through Southeast Caribbean

DON'T MISS

How Has Fast Food’s $20 Minimum Wage Affected Employment? Data Shows Hiring Up

DON'T MISS

Infant Found Dead in Fresno Backyard Sparks Investigation

DON'T MISS

Judge Protects Migrant Shelter, Accuses Texas of Harassment

UP NEXT

US Job Openings Rise to 8.1 Million Despite Higher Interest Rates

UP NEXT

Supreme Court Sidesteps Several New Gun Cases, Including Challenge to State Assault Weapons Ban

UP NEXT

Trump Says He Can End the Russia-Ukraine War in One Day. Russia’s UN Ambassador Says He Can’t

UP NEXT

Defense Secretary Austin Says the US Will Provide $2.3 Billion More in Military Aid to Ukraine

UP NEXT

California Legislature Makes a Flurry of Big Changes to November Ballot Measures

UP NEXT

Beryl Heads Toward Jamaica as a Major Hurricane After Ripping Through Southeast Caribbean

UP NEXT

How Has Fast Food’s $20 Minimum Wage Affected Employment? Data Shows Hiring Up

UP NEXT

Infant Found Dead in Fresno Backyard Sparks Investigation

UP NEXT

Judge Protects Migrant Shelter, Accuses Texas of Harassment

UP NEXT

Pressure Mounts on Biden, but Democrats Feel Powerless to Replace Him

Trump Says He Can End the Russia-Ukraine War in One Day. Russia’s UN Ambassador Says He Can’t

1 hour ago

Defense Secretary Austin Says the US Will Provide $2.3 Billion More in Military Aid to Ukraine

1 hour ago

California Legislature Makes a Flurry of Big Changes to November Ballot Measures

2 hours ago

Beryl Heads Toward Jamaica as a Major Hurricane After Ripping Through Southeast Caribbean

2 hours ago

How Has Fast Food’s $20 Minimum Wage Affected Employment? Data Shows Hiring Up

2 hours ago

Infant Found Dead in Fresno Backyard Sparks Investigation

2 hours ago

Judge Protects Migrant Shelter, Accuses Texas of Harassment

3 hours ago

Pressure Mounts on Biden, but Democrats Feel Powerless to Replace Him

3 hours ago

PG&E Warns of Possible Outages in Extreme Fresno Heat Wave

3 hours ago

Gov. Newsom Signs Landmark PAGA Reform Legislation

5 hours ago

Steve McQueen, a 1912 Indian, and Dan and Kathy Rouit’s Clovis Flat Track Motorcycle Museum

I recently had the privilege of spending an afternoon at the Dan and Kathy Rouit Clovis Flat Track Motorcycle Museum in Clovis, California. ...

45 mins ago

45 mins ago

Steve McQueen, a 1912 Indian, and Dan and Kathy Rouit’s Clovis Flat Track Motorcycle Museum

1 hour ago

US Job Openings Rise to 8.1 Million Despite Higher Interest Rates

1 hour ago

Supreme Court Sidesteps Several New Gun Cases, Including Challenge to State Assault Weapons Ban

1 hour ago

Trump Says He Can End the Russia-Ukraine War in One Day. Russia’s UN Ambassador Says He Can’t

1 hour ago

Defense Secretary Austin Says the US Will Provide $2.3 Billion More in Military Aid to Ukraine

2 hours ago

California Legislature Makes a Flurry of Big Changes to November Ballot Measures

2 hours ago

Beryl Heads Toward Jamaica as a Major Hurricane After Ripping Through Southeast Caribbean

2 hours ago

How Has Fast Food’s $20 Minimum Wage Affected Employment? Data Shows Hiring Up

MENU

CONNECT WITH US

Search

Send this to a friend