May Job Market Sees More Than Expected Strong Growth

Solid Job Growth in May

The U.S. labor market showed strength in May 2024, with nonfarm payroll employment rising by 272,000. The unemployment rate remained stable at 4.0%, according to the U.S. Bureau of Labor Statistics. Employment gains were led by the health care, government, leisure and hospitality, and professional services sectors.

Key Employment Statistics

• Unemployment Rate: The rate held steady at 4.0%, with 6.6 million unemployed individuals. A year ago, the rate was slightly lower at 3.7%.
• Demographic Unemployment Rates: Little change was observed across various groups: adult men (3.8%), adult women (3.4%), teenagers (12.3%), Whites (3.5%), Blacks (6.1%), Asians (3.1%), and Hispanics (5.0%).
• Long-term Unemployment: 1.4 million people were jobless for 27 weeks or more, representing 20.7% of all unemployed.

Labor Force and Part-Time Employment

• Participation Rate: The labor force participation rate was 62.5%, while the employment-population ratio stood at 60.1%, both showing little change from previous months.
• Part-time Employment: The number of people working part-time for economic reasons was stable at 4.4 million.

Sector-Specific Employment Gains

• Health Care: Added 68,000 jobs, with significant growth in ambulatory health care services (+43,000), hospitals (+15,000), and nursing and residential care facilities (+11,000).
• Government: Increased by 43,000 jobs, maintaining its average monthly growth trend.
• Leisure and Hospitality: Gained 42,000 jobs, with food services and drinking places contributing 25,000 jobs.
• Professional Services: Rose by 32,000 jobs, driven by increases in management, scientific, and technical consulting services (+14,000), and architectural and engineering services (+10,000).

Wage Growth and Work Hours

• Earnings: Average hourly earnings for all employees increased by 0.4% to $34.91. For production and nonsupervisory employees, wages rose by 0.5% to $29.99.
• Workweek: The average workweek remained steady at 34.3 hours, with manufacturing workweeks stable at 40.1 hours and overtime up slightly to 3.0 hours.

Revisions and Final Insights

• Previous Months’ Revisions: March employment was revised down by 5,000 to 310,000, and April by 10,000 to 165,000, making the combined revisions 15,000 lower than initially reported.

Market Outlook

The steady job growth and wage increases suggest a positive outlook for the U.S. labor market. Despite slight revisions in previous months, the consistent gains across key sectors indicate a robust employment situation, supporting a bullish sentiment in the market.