America's job market stays solid in May, but there are cooling signs
Add Axios as your preferred source to
see more of our stories on Google.
Is the American labor market white-hot or losing steam? The answer from the May jobs report released on Friday: yes.
Why it matters: The labor market is roaring, with employers once again adding way more payrolls than forecasters anticipated. Still, there are signs of softening trends that could suggest we're at a turning point.
By the numbers: The labor market added 339,000 jobs last month — the largest gain since January. Job gains in the previous two months were also stronger than initially thought, revised up by a combined 93,000.
- A separate survey of households, however, shows employment declining. The unemployment rate rose from 3.4% to 3.7% — a notable monthly jump.
- Some of the historic job market gains for marginalized workers melted away: The Black unemployment rate, for instance, hit an all-time low in April but jumped by nearly a full percentage point to 5.6% last month.
Of note: The household survey has a larger margin of error and is more volatile month-to-month. Economists tend to lean more on the survey of businesses, which is considered more reliable, especially after revisions.
- A big slump in the number of self-employed workers could explain why the household survey looks much weaker than that of establishments.
What they're saying: "There are clear signs the labor market is still hot, though it's cooling," Daniel Zhao, lead economist at job-finding site Glassdoor, tells Axios.
- "When you look under the hood of the report, permanent layoffs are rising."
What's next: Top Fed officials have strongly hinted they were inclined to "skip" an interest rate hike at its upcoming policy meeting. The details of today's jobs report might not be strong enough to change their minds.
- Headline jobs growth looks hot — a sign of still-strong demand on the part of employers. But that wasn't accompanied by accelerating wage growth, which is more likely to stoke inflation.
- Average hourly earnings rose 0.3% last month, slowing from the 0.4% pace in April. Notably, the share of prime-age workers employed or looking for work ticked up to 83.4% — the highest since January 2007.
