Unemployment Rate Edges Higher to 3.7%
New employment rose in May, reaching 339,000 for the month, following upward revisions of 52,000 more new jobs in March and 41,000 in April. This pushed the two previous monthly jobs growth figures to 217,000 and 294,000, respectively.
The most notable gains in the past month occurred in professional and business services, government, healthcare, construction, transportation and warehousing, and social assistance.
The unemployment rate rose by 0.3 percentage points, moving from 3.4% in April to 3.7% in May.
Average hourly earnings continued to expand but at a slower rate. May brought a 0.3% bump, which translates to an average hourly increase over the previous 12 months of 4.3%.
The average work week dipped to 34.3 hours for the month.
Temporary Job Trends:
The temp sector reversed direction, adding 7,700 jobs in May, after initially reported losses in May and April were restated more positively.
What Does It All Mean?
The latest employment numbers continue to confound economists, many of whom have consistently predicted lower numbers in recent months. A strong jobs market in May was accompanied by higher unemployment and higher but possibly slowing compensation trends. Of note, the overall labor participation rate remained steady at 62.6%, while prime age (25 - 54) participation rose to 83.4%. The latter is the highest the rate has been in 16 years.
Amid a confusing combination of factors that defy historical assumptions, one thing seems clear: the labor market may simply be another facet of life that no longer conforms to the norms and protocols relied on pre-pandemic. This requires a bit of rewiring in how the workplace, and frankly, the entire notion of work is viewed.
Until and if everything reverts to familiar patterns or new strategies arise to address today’s new realities, finding and retaining good talent remains a top priority for every employer. It is a challenge made even tougher as the number of job openings expands, labor supply remains tight, retirements accelerate, and generational differences continue to emerge.
Sources: U.S. Bureau of Labor Statistics (BLS), CNBC, CNN, Staffing Industry Analysts, NPR, The New York Times, The Washington Post, The Wall Street Journal