US employers added 339,000 jobs in May

JOB growth jumped in May, reaffirming the labour market’s vigor despite a swirl of economic headwinds.

US employers added 339,000 jobs, the Labor Department said on Friday (Jun 2), an increase from a revised total of 294,000 in April.

The unemployment rate was 3.7 per cent, up from 3.4 per cent.

The robust hiring suggests that employers remain eager for workers even in the face of high interest rates and economic uncertainty. Many are still bringing on employees to meet steady consumer demand, especially for services. And rather than lay off workers – which would signal deeper cracks in the labour market – a large swath of companies has been content to limit their head count through attrition.

An open question is whether employers can continue to rebuff economic challenges – and for how long. The Federal Reserve has been raising interest rates for more than a year to temper the labour market and rein in price increases.

“While overall the jobs market performance has been surprisingly strong, I think the labour market can’t defy the gravity of Fed rate hikes forever,” said Sarah House, an economist at Wells Fargo.

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Fed officials have indicated that the jobs report will be an important factor as they decide whether to raise interest rates again. Their next meeting is June 13 and 14.

Looming over the report is the debt ceiling deal, which the Senate passed on Thursday, though economists largely expect the spending caps and cuts to have only marginal impact on the labor market going forward. NYTIMES