PeopleScout Jobs Report Analysis – May 2022

U.S. employers added 390,000 jobs in May. This beat analyst expectations and shows continued strength despite the concerns of some economists. The unemployment remained at 3.6%. Year-over-year wage growth decreased slightly but remains high at 5.2%.

The Numbers

390,000: Employers added 390,000 jobs to the U.S. economy in May.

3.6%: The unemployment rate remained at 3.6%.

5.2%: Wages rose 5.2% over the past year.

The Good

After 12 straight months of greater than 400,000 monthly job growth, the 390,000 number is still good news. As CNBC reports, experts surveyed by Dow Jones had predicted just 328,000 new jobs. Despite concerns over an economic slowdown due to inflation, May’s numbers suggest that the job market continues to be strong. The labor force participation rate also increased to 62.3%, though it remains below pre-pandemic levels.

The Bad

While most sectors saw job growth in May, retail was the exception, shedding 61,000 jobs. The Washington Post reports that the shift comes as consumers have started spending less on goods and more on experiences like dining out and travel. (The leisure and hospitality sector again topped job growth with 84,000 new jobs.) The job market also remains tight, creating a tough market for employers. While wage growth has cooled slightly, it remains high.

The Unknown

As the Wall Street Journal reports, the Federal Reserve is now faced with the challenge of cooling inflation without tipping the economy into a recession. Federal Reserve Chair Jerome Powell told the publication last month, “There are pathways for us to be able to moderate demand, get demand and supply back in alignment, and get inflation back down while also having a strong labor market,” he said. “You’d still have quite a strong labor market if unemployment were to move up a few ticks.”