Economy beats expectations in May as inflation remains high
by Zachary Halaschak, Economics Reporter |
| June 03, 2022 08:31 AM
The economy beat expectations and added 390,000 jobs last month, an encouraging sign of the labor market's resiliency as the Federal Reserve raises interest rates.
The reading follows several months of strong job gains, which is positive economic news that President Joe Biden has touted even as painful inflation eats into the paychecks of people across the country.
The unemployment rate remained at 3.6% in May, the lowest level in decades.
“In essence, one could look at this as permission for the Fed to continue its move towards increasing interest rates, that to me is the big headline,” Brian Marks, executive director of the University of New Haven's Entrepreneurship and Innovation Program, told the Washington Examiner after the numbers were released.
One concerning sign in Friday's report, though, is evidence that wage gains are slipping further behind inflation. Average hourly earnings were up 5.2% for the year ending in May and 0.3% in that month alone. Consumer prices rose 8.3% through April and are not expected to have slowed significantly in May, meaning that real purchasing power is falling off quite quickly for many people.
National employment is still down by 822,000 despite the gains in recent months. Labor force participation remained about the same as the month before at 62.3%.
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https://www.washingtonexaminer.com/policy/economy-beats-expectations-in-may-as-inflation-remains-high
