US job growth beats expectations in May, firming recent gains
Translated from English, summarized and contextualized by DistantNews.
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- US job growth significantly exceeded expectations in May, with the unemployment rate holding steady at 4.3 percent.
- The labor market showed signs of firming, with May marking the third consecutive month of job increases, driven largely by the leisure and hospitality sector.
- Despite strong job growth, rising yields on US Treasury bonds fueled market anticipation of Federal Reserve interest rate hikes to combat persistent inflation.
US job growth surged past expectations in May, with the unemployment rate remaining steady at 4.3 percent, signaling a firming labor market after months of turbulence. Wall Street stocks dipped on the news, as investors anticipated the strong labor market would prompt the Federal Reserve to focus on combating inflation through rate hikes later this year.
stocks should go up, not down. Growth does not mean inflation!
Total non-farm payroll employment increased by 172,000 in May, marking the third straight month of increases. The leisure and hospitality sector led the gains, adding 70,000 jobs, partly due to hiring for upcoming World Cup matches. Health care also remained a strong performer, with 35,000 jobs added. However, employment in financial activities declined by 22,000.
The economy's on pretty firmer footing than we might have expected, and the only downside of this is it's driven by probably a relatively small group of high-income, high-wealth holders that are really driving consumption.
The data also revised job growth numbers for March and April upwards by a combined 93,000. Despite the positive job figures, average hourly earnings rose 3.4 percent year-on-year in May, lagging behind inflation and resulting in a loss of household purchasing power. Economists noted that wage gains have largely trailed inflation since 2021, contributing to public dissatisfaction with the economy.
The sector had an extra lift from hiring triggered by the upcoming World Cup matches.
DistantNews Editorial
Originally published by CNA in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.
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