Far surpassing expectations, the U.S. added a whopping 339,000 jobs in May
JUANA SUMMERS, HOST:
This morning we learned that employers added 339,000 jobs last month. And revised figures show hiring in March and April was also stronger than had been reported. That is good news for anyone who's looking for work. But the strength of the job market could also complicate the Federal Reserve's effort to bring down inflation. NPR's Scott Horsley joins us now. Hi, Scott.
SCOTT HORSLEY, BYLINE: Hi, Juana.
SUMMERS: All right. Scott, employers' appetite for workers just continues to defy expectations month after month. Where are all of these new jobs coming from?
HORSLEY: Yeah, pretty much across the board. We had lots of jobs last month in health care and business services and bars and restaurants. Even construction companies are hiring, even despite the high interest rates, which have really weighed on the housing market. You know, just about every month, forecasters think we're going to see a slowdown in hiring, and then the number comes out, and they just shake their heads. Ryan Sweet is chief U.S. economist at Oxford Economics.
RYAN SWEET: The labor market's red hot. And, you know, heading into the summer, you know, there's no indication that it was cooling off. By almost every metric that you look at when you're assessing the health of the labor market, it is strong. It's rock solid.
HORSLEY: Just about the only industries that lost workers last month were manufacturing, where we saw a small decline. And information, which is a catch-all category that includes software firms and media companies. Overall, though, the jobs engine just keeps chugging along.
SUMMERS: And, Scott, are employers able to find the workers that they need?
HORSLEY: It certainly seems like it. You're not hearing the kind of widespread complaints about worker shortages that you used to. Payrolls in most industries are now at least back to where they were before the pandemic. So there's not the mad scramble there was when everybody was trying to staff up at once. We're also seeing more workers coming off the sidelines and joining the labor force. That's especially true for people in their prime working years, 25 to 54. The share of people in that age group who are now working or looking for work is the highest it's been since 2007. And for women in that age group, it's the highest ever. That's a real turnaround from the depths of the pandemic, when a lot of women left the workforce. And there were concerns they might not come back. They are coming back. And Sweet thinks the ranks of working women is going to continue to grow.
SWEET: We have a large pipeline of women that are going to enter the labor force because if you look at the share of women versus men that, you know, are attending college, you know, that would argue that we're going to see more and more women coming into the labor force going forward. And I think that's a very good sign for the broader economy.
HORSLEY: We've also seen a rebound in immigration, which had largely dried up during the pandemic, and that's another important source of workers.
SUMMERS: As good as all of that sounds, we should also point out that the unemployment rate did tick up last month. What should we make of that?
HORSLEY: Yeah, the unemployment rate had been just 3.4%, matching the lowest it's been in half a century. And last month, it crept up to 3.7%. Now, that's still very low by historical standards, but it's a pretty big one-month increase. What's more, the unemployment rate for African Americans, which had fallen to a record low, jumped by almost a full percentage point. So that's not good. Now, the unemployment rate comes from a separate survey of households, which is smaller and can bounce around a lot. So I wouldn't make too much from one month's data, but it's certainly something to keep an eye on.
SUMMERS: And lastly, how will the Fed respond to this?
HORSLEY: Well, the Fed's been raising interest rates really aggressively in an effort to curb inflation. And this is going to be one more thing for the Fed to consider as it tries to decide whether to raise rates again when policymakers meet in a couple of months. Right now, though, the Fed's expected to leave rates unchanged. The stock market liked that. The Dow jumped nearly seven - just over 700 points today.
SUMMERS: All right. NPR's Scott Horsley, thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.