Economy Generated 390k New Jobs in May; Jobless Rate Unchanged at 3.6%
June 3, 2022
The Labor Department reported that nonfarm payrolls rose by 390,000 in May 2022 and the unemployment rate held steady at 3.6%. The report confirms that the labor market remains strong, despite the war in Ukraine and on-going supply-chain pressures. Concerns about rising wage costs and inflation are also supported by this report. Average hourly earnings for all employees on private nonfarm payrolls rose by $0.10 in May to $31.95. This was a gain of 5.2% from year-earlier levels but was less than the 5.5% gain seen in April.
The data shows that the labor market continues to gain momentum and wage growth is strong. The report strengthens the Federal Reserve’s intention of continuing to raise interest rates further following the 0.75 percentage point hike in the fed funds rate that has already occurred so far this year. Another 0.50 percentage point hike is anticipated at the next FOMC meeting.
Revisions subtracted 22,000 to total payrolls in the previous two months. Nonfarm payrolls were still down by 822,000 or 0.5% from their pre-pandemic level in February 2020. The market consensus had been for a gain of 320,000.
In a separate survey conducted by the BLS, the jobless rate was 3.6% for the third month in a row. The jobless rate is only 0.1 percentage point above the pre-pandemic level of 3.5% seen in February 2020, and well below the 14.7% peak seen in April 2020. The number of persons unemployed was essentially unchanged at 6.0 million but was still above the 5.7-million-person level seen prior to the pandemic.
Among the major worker groups, the unemployment rates were 3.4% for adult women, adult men (3.4%), teenagers (10.4%), White (3.2%), Black (6.2%), Asian (2.4%), and Hispanic (4.3%).
The labor force participation rate edged up 0.1 percentage point to 62.3% in May and was below the February 2020 level of 63.4%.
The April underemployment rate or the U-6 jobless rate was 7.1%, up from 7.0% in April 2022. This figure includes those who have quit looking for a job because they are discouraged about their prospects and people working part-time but desiring a full work week.
Employment in health care rose by 28,000 in May. Employment in health care was down by 223,000, or 1.3% from its level in February 2020. Employment in nursing care facilities rose by 1,300 positions to 1.348 million but was 35,600 less than year-earlier levels.
Employment in leisure and hospitality increased by 84,000 in May and were 1.3 million positions below the pre-pandemic level.
This blog was originally published on NIC Notes.
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