Economy added 339,000 new jobs in May despite Fed rate hikes, unemployment at 3.7%
by Zachary Halaschak, Economics Reporter |
June 02, 2023 08:32 AM
The economy again beat expectations in May and added 339,000 jobs, showing that the labor market is still holding up despite the Federal Reserve’s rate hiking.
The headline job growth number in Friday’s employment report from the Bureau of Labor Statistics was far more than predicted, although the unemployment rate rose to 3.7%, still a historically low figure.
Friday’s report is being closely scrutinized as it comes against the backdrop of several major economic developments, including the Fed’s rate hikes, banking sector turmoil, and a weakened housing market.
The employment report’s household survey found that the number of unemployed persons rose by 440,000 to 6.1 million. Amazingly, and despite the Fed’s tightening, the country’s headline unemployment rate has only ranged from 3.4% to 3.7% since March 2022.
"The data show that job growth is continuing at a rapid pace, but wage pressures are not building," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. "While payrolls accelerated for a second month, we think the wage data in particular will give the Fed room to hold policy steady at the upcoming meeting."
The labor force participation rate held steady from the month before at 62.6% in May, and the employment-population ratio was little changed at 60.3%.
A stronger jobs report shows that rate hikes aren’t harming the labor market as much as expected and could cause the Fed to lean toward another rate hike later this month.
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https://www.washingtonexaminer.com/policy/economy/economy-added-339-000-new-jobs-in-may-despite-fed-rate-hikes-unemployment-at-3-7
