The US labor market added 339,000 jobs last month, according to data released this morning from The Bureau of Labor Statistics’ Employment Situation for May. Unemployment ticked up slightly from 3.4% to 3.7% but remains hovering near the half-century low. The tight labor market is still the main contributing factor to high inflation despite rate hikes, big tech layoffs, bank closings, and debt-ceiling negotiations. Consumers seem to be unaffected by these issues as demand and spending remain high.
According to the ADP National Employment Report released on Wednesday, private employers in the US added 278,000 payrolls last month. ADP Chief Economist, Nela Richardson, says “This is the second month we’ve seen a full percentage point decline in pay growth for job changers. Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring.” Job changers saw only a 12.1% pay increase in May. Small and mid-sized companies saw increases in size, while large companies decreased.
Slowing wage growth may be the only redeeming factor of this week’s economic releases. Less wage growth means Americans have less money to spend and people start to prioritize saving. With less spending, overall demand goes down, and inflation follows easing economic worries, but there is no such hope on the horizon. The Expectations Index, a part of the US Consumer Confidence Survey, showed another decrease to 71.5 in May, still within the limits of a recession. All indexes included in the survey decreased, including the Consumer Confidence Index and the Expectations Index, although they remain above pre-2008 levels.
Professional and business services led job gains for a third time with 64,000 added jobs in May. Government employment rose by 56,000 jobs. Health care added 52,000 jobs, with the most gains in ambulatory health care services, which increased 24,000 and hospitals added 20,000. Leisure and hospitality added 48,000 jobs, most notably in food services and drinking places with a 33,000 increase. Construction added 25,000 jobs and transportation and warehousing added 24,000. The average hourly earnings for nonfarm payrolls increased by 11 cents and the average workweek remained went down .1 hour for all employees.