According to the most current data updates, US businesses generated at least 390,000 new positions in May, exceeding the predicted threshold.
Even though May’s growth was the smallest in a year, the US Labor Department’s result exceeded experts’ projections for a 325,0000 increase in new employment by the end of the month. The unemployment rate in the United States remained at 3.6 percent for the third month in a row.
Experts are monitoring the state of the job market in the world’s largest economy as fast-rising prices heighten fears of a future downturn.
In recent weeks, some companies have announced plans to slow or stop hiring. Walmart and Amazon, among other retail behemoths, have admitted to hastily completing their recruiting processes early in the year, resulting in decreased profits when rising prices proved more challenging to pass on to customers.
Meanwhile, Tesla is freezing hiring and has warned that up to 10% of its salaried employees may be laid off. Tesla CEO Elon Musk highlighted his discontent with the economy in a memo to employees obtained by Reuters.
The mood of consumers and financial markets has recently deteriorated. The annual inflation rate in the United States hit 8.3 percent in the year ended in April, a slight decrease from the rate in March but the highest since 1981, according to figures.
Job growth in May remained constant but at a slower pace than the previous year, according to analysts. Experts, on the other hand, have attributed the current delayed hiring to high expenses caused by the spike in energy prices brought on by the crisis in Ukraine.
Ian Shepherdson, the chief economist at Pantheon Macroeconomics, says he’s curious to see if companies have cut back on hiring in anticipation of consumers cutting back on their spending.
Many economists projected that job growth would slow after months of extraordinarily strong advances. Employment in the United States has essentially recovered to where it was before the Covid-19 outbreak in March 2020, according to the Labor Department.
With 84,000 new employment generated last month, the leisure and hospitality sector, still recovering from significant job cuts enforced during the Covid restrictions, saw the highest growth in new posts. Retail payrolls fell by 61,000, although the number of jobs is still higher than before the epidemic in February 2020.
Following a year of rapid growth, US President Joe Biden announced that the economy is entering a “new period of calm, steady growth” and that Americans should “expect to see greater moderation.”
In terms of monthly job numbers, Biden said that the United States is unlikely to experience the same kind of blockbuster figures it has had so far in 2022. He does, however, express his delight at how consistent the gains have been and how this consistency has put the United States in a great position to cope with inflation.
When challenged about Mr. Musk’s comments, Mr. Biden stated that other companies, such as Ford, have announced intentions to hire tens of thousands more people as they invest in electric vehicles.
He remarked, “I believe he’ll have a lot of luck on his expedition to the moon.”
As employers compete for workers, pay has been rising at a faster rate than it has in years. When compared to a year ago, the average hourly wage in the United States climbed by 5.2 percent to $31.95 (£25.50) in a month. Pay growth, on the other hand, was lagging behind rising living costs and decreased in May for the second month in a row.
The US Federal Reserve, like other central banks across the world, is raising interest rates to battle inflation. By boosting borrowing rates and cutting demand, such acts frequently hinder economic growth.