Month-over-Month Job Creation Doubles and Unemployment Rate Drops But Still Misses Expectations
With an influx of 559,000 new jobs in May, the economy added slightly more than double the number recorded in April (after an upward revision of 12,000 to 278,000).
As was the case in April, the most significant job creation in May was seen in leisure and hospitality. Additional gains were recorded in public and private education and in healthcare and social assistance.
The unemployment rate declined in May to 5.8%.
Average hourly earnings rose in May by 15 cents vs. 21 cents in April.
The average work week was 34.9 hours, a trend that has remained steady for three months.
TEMPORARY JOB TRENDS:
After a significant downturn in April (116,000 fewer jobs), the temporary help sector recovered, although it saw little movement in May, gaining only 4,400 new jobs. On an annual basis, temporary jobs are up 33% year over year, accounting for 2.65 million U.S. jobs.
WHAT DOES IT ALL MEAN?
As we approach the summer, we are seeing mixed signals about the pace of post-pandemic economic recovery. May saw a healthy increase in new jobs, yet many labor market watchers expected more. Some economists, citing pay increases, worry about the possibility of inflation; others are more optimistic, saying the slower pace of growth is fine. Business activity is definitely on the rise as pandemic restrictions ease further. Millions are vaccinated, and more communities are opting for onsite learning, freeing more people to return to work.
As was the case last month, however, employers continue to struggle with a constrained talent supply. Even more small business owners say they are unable to fill job openings (48% in May vs. 44% in April), according to the National Federation of Independent Businesses. With significantly more open jobs than people readily available (and appropriately skilled) to fill them, patience may be the most in-demand skill required as we wait for the long-anticipated return to accelerated growth.