Pandemic recovery has proven to be hectic across the US job market. With talks of a recession during the first half of 2023, the May jobs report from the Bureau of Labor Statistics left many economists very hopeful for Q3 and into 2024.
Statistics to Know
- Job Growth: May saw 339,000 new jobs created, a number that has grown month to month since February.
- Unemployment: Unemployment rose to 3.7% in May from 3.4% in April. The joblessness rate is the highest since October 2022.
- Wages: Wage growth continues to moderate, showing that measures to reduce inflation are working.
- Workweek: the average length of a workweek fell 0.1% to 34.3 hours a week.
What Does This Mean For The Economy?
After worries about a recession throughout the last quarter, the May jobs report gave a lot of hope to economists. The main takeaway from this report for most experts is that the job market is mostly strong, and should we slip into a recession, it likely won’t happen soon.
The May report is also positive news for the Federal Reserve, which announced it would pause interest rate hikes in June. The wage growth moderation shows that employers feel less pressure to increase wages and that inflation is likely slowing, the goal of the hiking campaign.
Despite the positive news, a drop in workweek length and a jump in unemployment suggest cracks. The report identified a considerable reduction in self-employed workers, disabled people, and the less educated, suggesting employers are more cautious about hiring.
For the manufacturing industry, other data points suggest the sector is shrinking despite massive job vacancies. Many employers report struggling to find qualified employees, and this problem may be exacerbated in Q3 as employers are generally cautious about underqualified workers.
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