Jobs Boom Is Starting to Cool, Raising Hopes for Goldilocks Scenario – By Michael Rainey and Yuval Rosenberg (The Fiscal Times) / June 3, 2022
Employers added 390,000 new jobs in May and the unemployment rate held steady at 3.6%, the Labor Department announced Friday, boosting hopes that the Federal Reserve can achieve a soft landing as it seeks to control a sustained burst of inflation that threatens to scar the U.S. economy.
The stronger-than-expected report shows that hiring remains robust, even as the Fed intensifies its effort to tamp down inflation through higher interest rates and quantitative tightening. The labor force participation rate inched a tenth of a point higher, to 62.3%, and with more than 151 million people employed, payrolls are now less than 1 million below the pre-pandemic peak. (The employment chart below from The Washington Post highlights just how strong the recovery has been.)
Although the report beat expectations, the May total did break a 12-month streak of job creation exceeding 400,000 per month. Many analysts see that as good news, suggesting the pandemic recovery is slowing slightly but still far from stall speed. Nominal wage growth also moderated in May, falling from an annual rate of 5.5% to a still-robust 5.2%, helping ease fears about a potential wage-price spiral. Real wage growth, however, was negative, as inflation continued to take a big bite out of worker pay.
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