Industries like healthcare and education also experienced accelerated retirements. The economy needs to add 70,000-100,000 jobs per month to keep up with growth in the working-age population.ĭespite massive layoffs in the technology sector after companies over-hired during the pandemic and the drag from higher borrowing costs on housing and manufacturing, the services sector, including the leisure and hospitality category, is still catching up after businesses struggled to find workers over the last two years. The economy created 93,000 more jobs in March and April than previously estimated. Economists polled by Reuters had forecast payrolls would increase by 190,000. The survey of establishments showed nonfarm payrolls rose by 339,000 jobs last month. There's likely enough pockets of softness in this report for the Fed to pass on raising rates at the next meeting." "However, the other areas of softness in this report suggests that the labor market is losing steam. "American businesses are still aggressively hiring, likely to meet resilient consumer demand," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. The mixed employment report offered more evidence that the economy was far from a recession, despite weakness in the interest-rate sensitive manufacturing sector and the housing market. Wage growth moderated last month, which should offer some comfort to Fed officials battling to bring inflation back to the U.S. The gradual increase in the labor pool is easing pressure on businesses to raise wages. Outside the COVID-19 pandemic, it was the biggest jump since 2010, reflecting a drop in household employment and a rise in the workforce. The increase in the unemployment rate from a 53-year low of 3.4% in April, which was reported by the Labor Department on Friday, was the largest since April 2020.
job growth accelerated in May, but a surge in the unemployment rate to a seven-month high of 3.7% suggested that labor market conditions were easing, which could give the Federal Reserve cover to skip an interest rate hike this month.
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