The U.S. labor market is hot and continues to show tight conditions, posing a difficult dilemma for the Federal Reserve regarding whether to raise interest rates further or hit the pause button.
Nonfarm payrolls increased by 339,000 in May, far exceeding economists' expectations of 190,000 and rising from April's upwardly revised 294,000 increase, the Bureau of Labor Statistics reported Friday.
The unemployment rate advanced from 3.4% to 3.7%, contrary to forecasts of an increase to 3.5%.
The average hourly wage increased by 0.3% month-over-month, in line with expectations of 0.3% but slowing from the prior month's gain of 0.4%. Annual wage growth was 4.3%, falling short of both expectations and the prior figure of 4.4%.
Key Takeaways From May Jobs Report
- The U.S. economy added 339,000 nonfarm payrolls in May, surpassing expectations of 190,000, according to Trading Economics, and higher than the previous month's 294,000 surge. The May's figure was in line with the average monthly gain of 341,000 over the prior six months.
- The change in total nonfarm payroll employment for March was revised by 52,000 jobs, from 165,000 to 217,000, and the change for April was revised higher by 41,000, from 253,000 to 294,000.
- The unemployment rate edged 0.3% higher to 3.7% in May, contrary to forecasts of an increase to 3.5%. The number of unemployed persons rose by 440,000 to 6.1 million, up from 5.7 million in April.
- Average hourly earnings on U.S. private nonfarm payrolls increased by 11 cents, or 0.3%, reaching $33.44 in May 2023, matching market expectations.
Sector-Specific Employment Changes
- Employment growth in leisure and hospitality continued to remain strong in May, up by 48,000.
- Construction added 25,000 jobs, while employment in transportation and warehousing increased by 24,000.
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May's Jobs Report Key For Fed Policy
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