Hiring jumps as economy continues to heat up
Unemployment rate fell to 3.8%, lowest since 2000
WASHINGTON — The U.S. economy added 223,000 job in May as U.S. companies continued their hiring spree, according to the Labor Department’s monthly jobs report released Friday.
The unemployment rate fell to 3.8 percent, the lowest since 2000.
In a highly unusual move, President Donald Trump tweeted early Friday morning that he was “looking forward to seeing the employment numbers.” Trump’s tweet moved markets as many on Wall Street thought the president was signaling that job gains would be far higher than the 200,000 that had been expected.
Stocks jumped at the open with the Dow rising more than 200 points.
Many economists predict the unemployment rate will fall even further this year, potentially dropping to 3.5 percent, which would be the lowest rate since 1969.
Wage growth ticked up slightly to 2.7 percent over the past year, but is still sluggish.
“The labor market is continuing its longest streak of job growth on record,” said Martha Gimbel, researcher director at Indeed.com, an employment website. “This recovery is showing no sign of slowing down.”
With its power to move the markets, the jobs report is a closely held secret before it is released.
Only a select few officials, including the labor secretary, the head of the president’s Council of Economic Advisers, the treasury secretary and the Fed chairman, are told prior to its release for fear that a leak could give some investors an unfair advantage.
Presidents have typically received an advance look at the jobs report and a longstanding federal rule forbids government employees from commenting on the jobs numbers until an hour after the release.
Tony Fratto, a Treasury Department official who worked in President George W. Bush’s administration, said that while not illegal, Trump’s tease could be deemed inappropriate because “you want market participants to get their data from their government in predictable, official ways, not haphazard ones.”
Jason Furman, the head of the Council of Economic Many economists predict the unemployment rate will fall further this year, potentially dropping to 3.5 percent. Advisers for President Barack Obama, tweeted that if Trump’s tweet conveys inside info, then he should never get the jobs report briefing again.
Lawrence Summers, who served as treasury secretary for President Bill Clinton, tweeted if during the Clinton or President Barack Obama administrations information had been similarly conveyed, “it would have been a major scandal — with all sorts of investigations following on.”
The director of the White House National Economic Council, Larry Kudlow, who briefed Trump on the jobs report Thursday evening, defended the president’s tweet as appropriate.
“Why not? He didn’t give any numbers,” Kudlow told reporters at the White House. “I just want to interject this radical notion: The jobs report was really good, the economy is doing really well.”
Trump’s embrace of the unemployment rate is a far cry from his 2016 campaign rhetoric when he called it “one of the biggest hoaxes in modern politics,” suggesting it was a phony number because it showed that the economy was expanding under Obama.
Hiring was strong across the board with retail and health care leading the surge in May.
Blue-collar jobs have also picked up in the last year as rising oil prices and the global economic rebound are driving more demand for construction and manufacturing workers.
The United States has gained 95,000 manufacturing jobs and 110,000 construction jobs from the start of the year through May. Hiring in manufacturing is off to the best start this year since 2011.
Executives at many companies complain they can’t find enough workers.
But the pickup in hiring this year suggests they are still adding to their head count, and more people are re-entering the job market after taking time off for health reasons, taking care of family or just because they didn’t think there were enough opportunities for them.
Job gains have averaged 207,000 a month this year, a faster pace than last year or the year before.
While American companies remain on a hiring spree, they continue to be reluctant to raise wages. The annual pace of wage growth in May was just 2.7 percent, barely above inflation.
This economic expansion is now the second-longest in modern American history, behind only the 1990s tech boom that saw widespread job and wage gains for people across the income and skills spectrum.
There are encouraging signs that more Americans are benefiting from today’s hot job market.
Unemployment for African-Americans has fallen to the lowest level on record, dropping below 6 percent for the first time ever, an encouraging sign that Trumpplayed up in a speech Friday at a Coast Guard ceremony.
The Hispanic rate is also close to its lowest level since the Labor Department began tracking the unemployment rates for minority groups in the early 1970s.
While African-American unemployment is still above that of whites, the gap has narrowed to the lowest ever.
The unemployment rate for Americans who graduated high school but didn’t attend college has also fallen sharply in recent months from 4.5 percent in January to 3.9 percent in May.