U.S. Adds 339,000 Jobs in May

(Courtesy U.S. Bureau of Labor Statistics)

The Bureau of Labor Statistics said total nonfarm payroll employment was up by 339,000 in May, while the unemployment rate ticked up by 0.3 percentage point to 3.7%.

Professional and business services, government, health care, construction, transportation and warehousing, and social assistance saw gains.

“Job growth was stronger than anticipated in May, with growth averaging 341,000 per month over the last 12 months, adding to the momentum thus far in 2023. This includes upward revisions to already strong job growth in March and April,” said Mike Fratantoni, Chief Economist of the Mortgage Bankers Association.

However, Fratantoni noted despite the added jobs there are indications of somewhat weaker labor demand in the data–namely that wage growth has slowed to 4.3% over the past 12 months and the slightly elevated unemployment rate.

With the latest set of employment numbers, eyes are on the Federal Reserve’s meeting June 13-14; the body has sought to curb inflation with a series of interest rate hikes over recent months.

“Several Federal Reserve officials have signaled that they are likely to hold rates steady at their upcoming June meeting but are unlikely to reduce rates anytime soon,” Fratantoni noted. “This somewhat mixed jobs report is likely to support that approach.”

For the housing and construction industry, First American Economist Ksenia Potapov noted employment for residential building construction employment is up 0.8% year-over-year, and nonresidential is up 4.1% year-over-year. Both also increased on a month-to-month basis.

“The continued strength is partially due to the yearslong struggle that builders have had attracting and retaining skilled construction workers, making them less likely to part with skilled workers, even in a weaker housing market,” Potapov said.

“The housing market continues to struggle against a lack of supply,” Fratantoni said. “A strong job market helps housing demand, particularly in the face of challenging affordability.”