Saturday 8 June 2024

Unemployment Jumps Suddenly In May Jobs Report

 The latest jobs report sent mixed signals, showing joblessness ticking up after a long stretch of low unemployment while the economy added new jobs faster than expected.

The unemployment rate unexpectedly jumped to 4% last month, according to the May jobs report, released Friday by the Labor Department.

For the past 27 months, the unemployment rate had remained below 4%, the longest such stretch since the 1960s.

The unemployment rate for black Americans jumped to 6.1% from 5.6%, while for white people, the unemployment rate remained lower than the overall rate at 3.5%.

The labor force participation rate also dipped suddenly to 62.5%, mostly due to young workers between the ages of 20 and 24 abandoning the job market.

Meanwhile, the U.S. economy added jobs faster than expected last month, although much of that growth was in part-time jobs, while the number of full-time jobs has fallen. A year ago in May, there were over a million more full-time jobs than there were last month.

Also, many of the new jobs went to migrants.


The number of U.S.-born workers fell last month by 663,000 to about 130,445,000. Meanwhile, the number of foreign-born workers rose by 414,000.

Employers added 272,000 new non-farm jobs last month, beating economists’ estimates of about 180,000 jobs and a 3.9% unemployment rate.

Most of the new jobs appeared in health care with 68,000 additional jobs, government with 43,000 jobs, and leisure and hospitality with 42,000 jobs.

Manufacturing and construction jobs also ticked higher last month.

The high number of new jobs could discourage officials at the Federal Reserve from cutting interest rates this year since they have been waiting for the job market to cool while unemployment remains low.

Despite the robust job gains, the Labor Department’s household survey showed 408,000 fewer people working last month.

Wage gains exceeded expectations, with average hourly pay rising by 0.4% in May from the previous month. This brings the average hourly wage up 4.1% over the past year.

President Biden celebrated the jobs report, declaring in a release, “On my watch, 15.6 million more Americans have the dignity and respect that comes with a job.”

At the same time, former President Trump’s campaign slammed the jobs report in one of the campaign’s daily emails, calling the report “yet another indication that ‘Bidenomics’ does not work.”

The economy has loomed large as the election cycle heats up, with voters saying inflation is their top concern, according to recent polls. Immigration and the crisis at the border has also polled as a top issue in recent months, at times even eclipsing the economy.

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