Unemployment ticks up despite adding more jobs than analysts expected.
In May, employers in the U.S. experienced a significant acceleration in hiring as they added a booming 339,000 jobs, and the labor market demonstrated resilience against high interest rates and persistent inflation, according to the Labor Department. The unemployment rate, as reported on Friday, rose from a five-decade low of 3.4% to 3.7%. Economists surveyed by Bloomberg had estimated that 195,000 jobs were added last month.
- Actual: 3.7%
- Forecast: 3.5%
- Previous: 3.4%
Despite the Federal Reserve’s aggressive interest rate hikes aimed at tamping down hiring and wage growth, and wrestling down inflation, the job market has demonstrated remarkable sturdiness. Fed officials have stated their potential plan to pause the rate increases at a meeting this month. However, a booming May jobs report and concerning inflation data could potentially disrupt that plan. While job growth has generally slowed in recent months due to climbing interest rates and increased recession fears, the numbers have been volatile. Nevertheless, companies, facing frustrations with pandemic-related worker shortages, are still actively hiring workers and minimizing layoffs.