The U.S. economy added 339,000 jobs in May, smashing estimates, while the unemployment rate ticked up to 3.7%, according to the Bureau of Labor Statistics. Economists had expected May to bring in around 190,000 jobs.
The data didn’t bring the slowdown in hiring many had expected to see. In fact, the BLS revised jobs numbers for March and April up by 52,000 and 41,000, respectively. That puts March’s jobs total at 217,000 and April’s at 294,000.
May’s 339,000 jobs added is in line with the average monthly gain of 341,000 over the past 12 months. Job gains were seen across several sectors, including government, health care, construction and transportation.
The unemployment rate, however, did increase from 3.4% in April to 3.7% in May. The government said the number of unemployed people in the U.S. rose by 440,000 to 6.1 million. The unemployment rate has remained between 3.4% and 3.7% since March 2022.
Combined with stickier inflation figures over the past few weeks, more analysts now expect the Federal Reserve could still hike its interest rate again this year after raising it above 5% in the May meeting. For now, Fed officials are signaling a pause in the June meeting while indicating rates could rise later this year. The next rate hike decision will be June 14.
“Some modest slowing in wage growth and a higher unemployment rate could give the FOMC doves enough ammunition to pause in June but remain open to a rate hike at the next meeting in July,” Wells Fargo economists Sarah House and Michael Pugliese wrote Friday. “We continue to lean toward the FOMC leaving the fed funds rate unchanged at the June meeting as the most likely outcome, but would not be shocked by a rate hike either.”
The next consumer price inflation report will be released on June 13, the first day of the Fed’s next meeting.
