- Non-farm U.S.A. jobs increased in May by 339,000, which is much higher than the 190K that Dow Jones estimated.
- The employment rate in the country spiked to 3.7% in May compared to the 3.5% recorded previously. The unemployment rate is the highest recorded since October 2022.
U.S.A. jobs increased at a higher-than-expected rate, and so did the unemployment rate
The U.S.A. has been battling a declining economy for several months with record-high inflation rates, debt ceiling crises, bank meltdowns, and job market shakedowns. A Friday report from the government shows that U.S.A. jobs in May increased by 339,000, better than Dow Jone’s estimate of 190K.
While non-farm U.S.A. jobs are increasing, unemployment is also higher than anticipated. It is at 3.7%, the highest figure recorded since October 2022. The growth in the number of U.S.A. jobs indicated in the Friday job market report marks the 29th straight month of positive growth.
The average hourly earnings, a key inflation indicator, rose by 0.3% in the month, in line with expectations. On an annual rate basis, wages increased by 4.3% in May, which is 0.1% below the estimate. The report also shows that the average workweek fell by 0.1 hours to 34.3 hours.
The U.S.A. jobs report was received well by the markets, with Dow Jones Industrial Average rising by more than 400 points in early trading. Treasury yields followed suit and rose as the market digested the report and developments behind the Senate passing the debt ceiling bill.
“The U.S. labour market continues to demonstrate grit amid chaos – from inflation to high-profile layoffs and rising gas prices,” said Becky Frankiewicz, president, and chief commercial officer of Manpower Group. “With 339,000 job openings, we’re still rewriting the rule book, and the U.S. labour market defies historical definitions.”
May’s hiring rate was almost at par with the 12-month average of 341K, which is great for an economy slowing down. The highest net hires came from Professional and business services, with 64,000 hires. The government also had a significant hire by adding 56,000 new jobs, while the healthcare sector contributed 52,000 new hires.
Other notable sectors were leisure and hospitality, which contributed 48,000 new hires, as construction contributed 25,000, and transportation and warehousing, followed by 24,000 new hires.
The U.S. had highly anticipated this labour report as it will be key in the decision-making process of the Federal Reserve regarding the next move in interest rates. The uptick in the unemployment rate remains a genuine sign of weakness in the market, with a rise in wages signifying that inflation could stick if not acted upon with urgency.
Keep watching Fintech Express for updates on the U.S. economy and Fintech-related developments.