May exceeds expectations with 390,000 jobs added

Despite worries over growing inflation and a possible recession, the US jobs market remained hot in May, shrugging off concerns over a slowing economy. Adding 72,000 more jobs than expected (390,000 reported vs. 318,000 expected), May is now the 17^th consecutive month of growth for the US economy.

The economy is growing closer to pre-pandemic levels

While the past three months each saw additions of more than 400,000 jobs, May still outperformed when compared to pre-pandemic times. In 2019, the average payroll growth was just 164,000 per month – less than half of this month’s gain. This brings employment levels to within 1% of pre-pandemic times.

Many sectors in the United States are now performing at, or above, their February 2020 levels. These include professional and business services (821,000 higher than February 2020), construction (40,000 higher), and state government education (27,000 higher).

Unemployment rates remained constant

Though unchanged from last month, May’s unemployment rate (3.6%) is within .1% of the pre-pandemic low reported in February 2020. The labor force participation rate increased slightly this month, growing to 62.3%.

May, also celebrated as Asian American and Pacific Islander Heritage Month in the US, saw a 2.4% decline in the unemployment rate for Asians (the fastest-growing ethnic group in America). This number is expected to continually decline as more companies recruit AAPI talent.

Leisure and hospitality remain on top

As revenge travel emerges as a major trend for summer, it’s no surprise that the leisure and hospitality industry saw the most growth in May. With 84,000 total jobs added to the sector, significant increases were reported in food services (46,000 jobs added) and accommodation (21,000 jobs added).

Rising inflation is pushing the cost of goods higher and higher, and predictably, the retail industry saw a loss of 61,000 jobs this month. Employment in general merchandise stores took the biggest hit (33,000 jobs lost), while clothing and accessories stores and food and beverage stores lost a combined total of 17,000 jobs.

Hourly wages grew, but not enough

Despite recent efforts by the Federal Reserve to control inflation, rates are inching toward a 40-year high. On the other hand, average hourly wage growth has remained constant at .3% (10 cents) from April to May.

Compare that to gas prices, which have risen 13% since the last month, and it’s easy to see why many American consumers have been struggling. The Federal Reserve announced on June 2 that they will continue to raise interest rates with the hope of bringing the inflation rate down to 2%. Only time will tell if this move results in its desired impact.

Adecco is here to help

Because of rising interest rates and an economy that shows no sign of cooling, it can be hard to handle this ever-changing job market. Luckily, our services will help you stay ahead. At Adecco, we can quickly mobilize the right pre-qualified temporary and direct hires at the best pay rate to match market demand. In addition to connecting you with experienced workers, we’ll help you retain them through optimized wages, benefits, and comprehensive training. Talk to us about how we can help you seize the opportunities today while preparing your workforce for an unpredictable future.