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Highlights:
- US Employers added more jobs than estimated in May.
- Nonfarm payrolls climbed to 390,000 jobs last month.
- The unemployed rate remained stable at 3.6%.
US employment figures were better-than-expected in May while the unemployment rate remained stable at 3.6%, the labor department said on Friday.
The US labor market is currently tight, even as the Federal Reserve works to cool demand.
Nonfarm payrolls jumped 390,000 last month, the report said. The adjusted April data showed that payrolls grew by 436,000 instead of 428,000.
Economists surveyed by Reuters predicted payrolls to increase by 325,000 last month. Their estimate range was from a low of 250,000 to as high as 477,000.
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Economy expanding, albeit at a moderate pace
The strong wage gains last month indicate that the economy is expanding, although, at a slow pace, the labor report said. Meanwhile, the Fed is trying to reduce the labor demand to contain inflation. It also must be cautious not to push the unemployment rate too high.
The Central Bank’s hawkish monetary policy and squeezing of covid-era stimuli have raised investors’ fears of an impending recession next year.
However, some economists believe that the fundamentals of the US economy are in place. Despite the fear of a looming recession dominating the market sentiment, they believe the economic growth will continue next year.
However, they admit that high inflation has subdued consumers’ purchasing power and business investment. According to them, a downturn is unlikely, and even if it happens, it will be mild.
Bottom line:
There is a shortage of labor in the US as jobs outnumber potential applicants. By April end, there were 11.4 million job openings in the US, which means nearly two jobs for every unemployed person.
