US extends hiring streak, but also shows cooldown
Employers add 390,000 jobs in May for the lowest monthly gain in a year
WASHINGTON — U.S. employers added 390,000 jobs in May, extending a streak of solid hiring that has bolstered an economy under pressure from high inflation and rising interest rates.
Last month’s gain reflects a resilient job market that has so far shrugged off concerns that the economy will weaken in the coming months as the Federal Reserve steadily raises interest rates to fight inflation. The unemployment rate remained 3.6%, just above a half-century low, the Labor Department said Friday.
The job growth in May, though healthy, was the lowest monthly gain in a year. But it was high enough to keep the Fed on track to pursue what’s likely to be the fastest series of rate hikes in more than 30 years.
Businesses in many industries remain desperate to hire because their customers have kept spending freely despite intensifying concerns about high inflation. Americans’ finances have been buoyed by rising pay and an unusually large pile of savings that were accumulated during the pandemic, particularly by higher-income households.
“Given all the talk we’ve heard about recession and economic headwinds, it was very reassuring to see a solid jobs number,” said Mark Vitner, senior economist at Wells Fargo.
One encouraging sign, Vitner said, was that hiring was broad-based across most of the economy.
Nearly every large industry added workers in May. One major exception was retail, which shed nearly 61,000 positions. Some large retailers, including Walmart and Target, have reported disappointing sales and earnings. Last month, Walmart said it had over-hired and then reduced its head count through attrition.
Construction companies added 36,000 jobs, a hopeful sign for Americans who have bought new homes that aren’t yet built because of labor and parts shortages. Shipping and warehousing companies, still struggling to keep up with growing online commerce, added 47,000 jobs. Restaurants, hotels and entertainment venues hired 84,000.
Last month, Friday’s report showed, more Americans came off the sidelines of the workforce and found jobs, a strong indication that rising wages and plentiful opportunities are encouraging people to look for work.
Still, the proportion of people who either have a job or are looking for one remains below pre-pandemic levels.
Rising prices might also have led some to take jobs: The number of people age 55 or older who are working rose last month, suggesting that some older Americans are “unretiring” after leaving their jobs — or being laid off — during the pandemic and its aftermath.
Workers, in general, are enjoying nearly unprecedented bargaining power. The number of people who are quitting jobs, typically for better positions at higher pay, has been at or near a record high for six months. Layoffs are at their lowest level on records dating back 20 years.