US Added 390,000 Jobs in May as Employment Growth Slows to 13 Month Low

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The U.S. economy added 390,000 jobs in May, topping the market estimate of 328,000.

According to data from the Bureau of Labor Statistics (BLS), the unemployment rate remained unchanged at 3.6 percent.

Average hourly earnings edged up 0.3 percent month-over-month, while annualized hourly early earnings increased by 5.2 percent. Average weekly hours stayed the same at 34.6. The labor force participation rate rose to 62.3 percent.

Economists had forecast that job growth would slow to a 13-month low last month.

Last month, retail trade fell by 61,000 jobs, with most of the employment declines led by merchandise stores (-33,000), apparel (-9,000), building material and garden supply stores (-7,000), and health and personal care outlets (-5,000).

Employment in leisure and hospitality rose by 84,000, led by food services (+46,000) and accommodation (+21,000). This is still 7.9 percent below February 2020 levels.

Business and professional services increased by 75,000, but this is 821,000 higher than before the coronavirus pandemic.

Transportation and warehousing jobs added 47,000 jobs, which is 709,000 positions above its pre-crisis level. Construction jobs jumped by 36,000. Manufacturing positions rose by 18,000, while mining employment swelled by 6,000. Wholesale trade gained 14,000 jobs.

The BLS also revised total non-farm payroll employment for the previous two reports. In March, the U.S. economy added 398,000 jobs, down 30,000. The change for April was updated by 8,000, increasing the total figure to 436,000.

In addition, BLS numbers reported that 1.8 million people were unable to work in May because their employers shut down due to the pandemic.

This comes after ADP reported that private businesses hired 128,000 employees in May, the smallest number in more than two years. The figure was also below the market estimate of 300,000.

According to ADP, the services sector added most of the jobs with 104,000, led by education and healthcare (46,000) and professional and business services (23,000). The goods-producing industries created 24,000 new positions as manufacturing was at the top with 22,000).

Large- and mid-sized companies added 122,000 and 97,000 jobs, respectively. But small companies lost 91,000 positions. In total, smaller U.S. firms have lost close to 300,000 jobs since February.

“Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels. The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late,” said Nela Richardson, the chief economist at ADP, in a statement.

By Andrew Moran

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