US economy added a whopping 272,000 jobs in May | CNN Business (2024)

US economy added a whopping 272,000 jobs in May | CNN Business (1)

Economists were expecting May job growth of 180,000 payrolls and an unemployment rate to hold tight at 3.9%.


US job growth shot much higher than expected in May, jumping to 272,000, while the nation’s jobless rate rose slightly and broke a 27-month streak of below-4% unemployment.

At a time when Americans and the Federal Reserve are clamoring for clear-cut data about the state and trajectory of the economy, Friday’s jobs report was much more opaque than everyone had hoped.

“It’s hard not to like a lot of jobs, and this report was well above what I expected, and I think just about what everyone expected,” Dean Baker, an economist who co-founded the Center for Economic and Policy Research, told CNN. “We’re seeing a lot of job growth, that’s a generally good story.”

He added: “But the Fed’s going ‘Oh, can we cut [interest rates]? Can we cut? Can we cut?’ It’s hard to look at this report and make a good case for cutting, I’ve got to say.”

May’s job gains are considerably higher than the April total, which was revised down to 165,000, according to Bureau of Labor Statistics data released Friday. The May data came in well above expectations for 180,000, according to FactSet consensus estimates.

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The unemployment rate rose to 4% from 3.9%. It’s the first time in more than two years that the jobless rate is not below 4%.

Stronger-than-expected wage gains for the month pushed up average hourly earnings to 4.1% over the past year, reversing a monthslong trend of cooling there.

“The Fed doesn’t directly target wages; but where the wages picked up are in the areas where we’ve seen the most inflation,” Diane Swonk, chief economist with KPMG, told CNN.

That’s in the service sector, everything from personal care services, dry cleaning, cleaning and home maintenance and vehicle maintenance, she said.

“And that is something that is hard for the Fed, because in order for some of the increases we’re seeing in the service sector, we need to see offset in goods prices in order to bring inflation down,” she said. “But you need a lot of that consistently to deal with stickier inflation that we’re seeing in the service sector; and, unfortunately, wages matter more in particular areas where inflation has gotten stickiest.”

Critical inflation data is due out Wednesday: The May Consumer Price Index lands the same day the Fed will make its latest policymaking announcement (which is overwhelmingly expected to be that they are keeping rates on hold).

Traders weren’t too giddy about Friday’semploymentreport, at least when it comes to rate cut prospects. Wall Street’s best bet for the first rate cut is now December, the CME FedWatch Tool shows.

A tale of two surveys

Friday’s jobs report, at initial glance, appears to be a mixed bag both for Americans and the Fed, which is wanting to see a slowing in demand to help tamp down inflation.

The strong job market has underpinned a robust period of consumer spending that has kept the economy churning — but has not necessarily helped in the inflation fight.

The surge in job gains and the rising unemployment offer a tale of two surveys: The monthlyjobsreport is composed of two surveys to measureemploymentlevels and activity, one that surveys non-farm businesses aboutemployment, hours and earnings, and the other of households to obtain the labor force status of the population with demographic details.

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Employment fell in the household survey, while unemployment increased to just shy of 6.5 million and pushing the unemployment rate to the threshold of 4%. However, the household survey typically is more volatile than the establishment survey that showed payroll gains jumping higher.

“It is literally the height of confusion trying to make sense of one of the most divergent monthly employment reports that we can ever remember,” economist Chris Rupkey, of FwdBonds, wrote in a note issued Friday. “Is it safe out there for consumers and businesses or is the economy on the cusp of a recession?”

CEPR’s Baker said the growing “dissonance” between the household and establishment surveys could be a reflection of the data not fully picking up the post-pandemic surge in immigration that economists say have increased the supply of workers and productivity, allowing for stronger job growth without being inflationary.

“The immigrants are overwhelmingly working when they’re coming here, and we have the data on that,” Baker said. “But my best guess is we’re not picking up the full impact of immigration with the population controls [of the BLS survey].”

Americans are still faring well

Friday’s jobs report may be a mixed bag at a time when the Fed is trying to rein in inflation; but from a historical standpoint, this current jobs market remains one for the record books.

And from a current standpoint, one that’s healthy for Americans who are trying their hardest to keep up with inflation.

“I think it still shows that there’s still plenty of support within the labor market for people who depend on income for spending, which is obviously the vast majority of Americans,” Thomas Simons, senior economist at Jefferies, said in an interview.

Through May, the US economy has added an average of 247,800 jobs per month, which is roughly in line with the strong job growth seen last year. March’s and April’s estimated payroll gains were revised down slightly: March by 5,000 to 310,000; and April by 10,000 to 165,000.

May marks the 41st consecutive month of job gains, extending what is the fifth longest streak on records that go back to 1939, BLS data shows.

Service-providing industries accounted for the bulk of the month’s job gains, with health care and social assistance continuing to lead the way, with 83,500 jobs added. Health care, government and leisure and hospitality accounted for 60% of May’s gains; however, interest rate-sensitive sectors such as construction and manufacturing added jobs as well, Nick Bunker, economic research director for North America for the Indeed Hiring Lab, wrote in a note issued Friday.

“The gains are still broad-based,” he said.

The BLS’ “diffusion index,” which is a measurement of the percentage of industries that are adding or losing jobs, hit 63.4 in May, which is the highest it’s been since January 2023.

The labor market is still showing a lot of strength, Bunker said, noting that the increase in unemployment can be attributed to workers 24 and under, as prime-age employment rose.

In fact, the labor force participation rate for prime working-age women (25-54 years old) set a fresh all-time high of 78.1% in May, BLS data shows.

“Don’t get overly spooked by the rise in the unemployment rate,” Bunker wrote. “The labor market is still gliding toward a soft landing.”

CNN’s Bryan Mena contributed to this report

US economy added a whopping 272,000 jobs in May | CNN Business (2024)


US economy added a whopping 272,000 jobs in May | CNN Business? ›

The economy added 272,000 jobs last month, above expectations for 180,000 positions added. The unemployment rate rose to 4% from 3.9%, according to the Bureau of Labor Statistics data. Wage growth rose for the first time in months. Workers made $34.91 an hour on average in May, up 14 cents, or 0.4%, from April.

How many jobs were added in May 2024? ›

The Bureau of Labor Statistics (BLS) reported that the U.S. economy added 272,000 jobs in May 2024, a much better-than-expected report as it easily beat consensus expectations.

How many Americans lost jobs in the Great Recession? ›

In late 2009, more than 15 million people were unemployed. Total employment, as measured by the Current Population Survey (CPS),2 dropped by 8.6 million, or almost 6 percent. In 2010, however, the U.S. economy and labor market began to recover.

What is the US economy employment rate? ›

Both the labor force participation rate, at 62.5 percent, and the employment-population ratio, at 60.1 percent, were little changed in May. These measures showed little change over the year. (See table A-1.) The number of people employed part time for economic reasons, at 4.4 million, changed little in May.

Does a recession increase employment? ›

Key Takeaways. Recession and unemployment go hand in hand and reinforce one another. Unemployment rises quickly but drops slowly in a downturn, and its long-term effects are costly.

How many jobs did the US add in May? ›

Economists were expecting May job growth of 180,000 payrolls and an unemployment rate to hold tight at 3.9%.

How many jobs will be added between 2014 and 2024? ›

Between 2014 and 2024, about 9.8 million new jobs are projected because of employment growth but 35.3 million openings are projected because of replacement needs.

How many people are unemployed in the US in 2024? ›

U.S. unemployment level seasonally unadjusted number 2022-2024. In the United States, approximately 6.24 million people were unemployed and looking for work in May 2024. The data has not been seasonally adjusted.

What is the highest employment rate in US history? ›

Employment Rate in the United States averaged 59.25 percent from 1948 until 2024, reaching an all time high of 64.70 percent in April of 2000 and a record low of 51.20 percent in April of 2020.

What state has the highest unemployment rate? ›

U.S. monthly state unemployment rate 2024

In April 2024, California and Colorado had the highest unemployment rates in the United States, with unemployment rates of 5.3. The unemployment rate was also high in Florida, with an unemployment rate of 5.2 percent in February.

Who gets laid off first in a recession? ›

However, patterns emerging during layoffs earlier this year show that non-essential departments, meaning those that don't contribute to the core functionality of the business, are the ones that often see cuts first.

Which jobs are most affected by recession? ›

Who loses jobs in a recession? Recessions cause people to lose jobs in lots of different industries. During the Great Recession, the unemployment rate hit 10%. Construction and manufacturing often have to cut back on jobs more than other industries, but tech companies can also get hit by layoffs.

What is the SAHM rule? ›

Sources > Sahm, Claudia. The Sahm Rule identifies signals related to the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to its low during the previous 12 months.

What is the most demand jobs in 2024? ›

Best Jobs of 2024
  1. Mental health technician. ...
  2. Loan officer. ...
  3. Mental health therapist. ...
  4. Electrical engineer. ...
  5. Construction project manager. ...
  6. Mechanical engineer. ...
  7. Psychiatrist. ...
  8. Human resources manager.
Apr 18, 2024

What are the employment trends in 2024? ›

The 2024 US job market embodies a dynamic amalgamation of continuity and change, underscored by trends such as remote work adoption, AI integration in recruitment, and a renewed focus on employee well-being and skills-based hiring.

What is the highest projected employment for 2024? ›

The Top 20 Fastest-Growing Careers for 2024
RankCareer2022 Median Pay
1Nurse practitioner$125,900 per year
2Wind turbine service technician$57,320 per year
3Ushers, lobby attendants, and ticket takers$24,440 per year*
4Motion picture projectionists$29,350 per year*
16 more rows
Jun 12, 2024

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