The U.S. economy added modestly more-than-expected new jobs in May, with moderating monthly wage pressures, the Labor Department said Friday, amid signals of a slow-down in hiring heading into the summer months.
The Bureau for Labor Statistics said 390,000 new jobs were created in May, with headline unemployment rate holding at post-pandemic low of 3.6%. Hiring was powered by the leisure, hospitality and business services sectors, the BLS said. Employment in retail was down by 61,000, the BLS said, but is still up 159,000 when compared to February 2020 levels.
The May tally was around 60,000 head, of the Street consensus forecast of 325,000. The BLS also revised its April jobs addition tally by 8,000, to 436,000 from its original estimate of 428,000. March totals were revised lower, to 398,000.
The BLS noted that wages rose 0.2% on the month, and up 5.2% on the year to $31.95 per hour, a figure that will possibly add to concerns over the pace of wage inflation and its extended impact on the so-called second round' effects against surging food and energy prices. Analysts had expected a month-on-month increase of around 0.3%, but the 5.2% gain represents the fifth consecutive month of +5% gains.
“Despite the slight cooldown, the tight labor market is clearly sticking around and is shrugging off fears of a downturn. We continue to see signs of a healthy and competitive job market, with no signs of stepping on the brakes yet," said Glassdoor’s Senior Economist Daniel Zhao.
"Payroll employment is now just 822,000 jobs short of pre-pandemic levels, hitting a new milestone," he added. "With this slowdown in jobs growth, the date of returning to pre-pandemic levels of jobs growth will be pushed back, but most likely will still happen by the fall."
U.S. equity futures extended earlier declines following the data release, with contracts tied to the Dow Jones Industrial Average indicating a 225 point opening bell dip and those linked to the S&P 500 priced for a 38 point move to the downside.
Benchmark 10-year Treasury note yields bumped to 2.947% while the dollar index, which hit a fresh 20-year high last month, was little-changed at 101.929.
Earlier this week, ADP said in its National Employment Report, which it complies with Moody's Analytics, that private sector jobs grew by just 128,000 last month, well shy of Street forecasts of a 300,000 total, and the smallest monthly gain in two years, with small and medium-sized companies feeling the most significant affect.
