scorecardThe US labor market is still red-hot, adding 339,000 jobs in May
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The US labor market is still red-hot, adding 339,000 jobs in May

Madison Hoff,Andy Kiersz   

The US labor market is still red-hot, adding 339,000 jobs in May
PolicyPolicy2 min read
  • The US added 339,000 jobs in May, handily surpassing the forecast of 180,000.
  • The unemployment rate climbed to 3.7% in May, according to the jobs report on Friday.

The US labor market continues to stun, adding 339,000 nonfarm payrolls in May, according to a Bureau of Labor Statistics (BLS) report on Friday.

This monthly job growth came in far above the forecast of 180,000. May's job creation was also above the revised growth in April.

April's job creation was revised from 253,000 to 294,000. March's job growth was also revised from 165,000 to 217,000 according to the latest BLS report.

The US unemployment rate increased to 3.7% in May, which means it was higher than the 3.5% expected. April's rate was 3.4%.

"In the last few months, the job market has continued to defy gravity, adding a steady clip of jobs and holding unemployment at historically low levels despite a backdrop of rising interest rates, banking turmoil, tech layoffs and debt ceiling negotiations," Daniel Zhao, Glassdoor's lead economist, wrote in a preview ahead of Friday's report from the Bureau of Labor Statistics.

Job gains were distributed widely across major industry sectors. Professional and business services added 64,000 jobs in May, and the leisure and hospitality sector, which has been a major driver in the post-COVID economic recovery, added 48,000. A couple sectors saw small job losses during the month, with manufacturing shedding 2,000 jobs and the information sector losing 9,000.

Wage growth, which the Federal Reserve is watching closely amid its ongoing fight against inflation, continued its modest decline while staying higher than the pre-pandemic norm. Average hourly earnings among all private workers were up 4.3% over the last year.

The labor force participation rate, which measures the share of Americans working or actively looking for a job, held steady at 62.6% for the third month in a row.

Job openings data for April was released by the BLS on Wednesday. Data from the Job Openings and Labor Turnover Survey (JOLTS) showed that after a few months of job openings consecutively falling, there was an uptick from March to April. Job openings soared by 358,000 to 10.1 million. Job openings had been below 10 million in February and March.

"If you look past the unexpected rise in job openings, today's JOLTS report contains a bevy of data showing a resilient yet moderating labor market — confirming the months-long slowing trend," Nick Bunker, head of economic research at the Indeed Hiring Lab, wrote in a post on Wednesday.

The number of layoffs and discharges fell by 264,000 from March to April to 1.6 million, according to the latest JOLTS report. Additionally, the number of quits dropped by 49,000 from March to April, following a drop of 138,000. The level was about 3.8 million in April, like it was the month before.

Quits have generally been falling, supporting a "Big Stay" workplace trend that ADP's chief economist Nela Richardson has talked about. A Bank of America Institute report noted based on job-to-job changes using Bank of America data that "fewer people are moving between jobs."