US added 172,000 jobs in May as labor market shows signs of resilience | US economy
U.S. employers added 172,000 new jobs in May, while the nation’s unemployment rate remained steady at 4.3%; This is a sign that the labor market is resilient despite rising inflation and economic uncertainty caused by ongoing conflicts in the Middle East.
Despite positive developments in the labor market, US stocks fell sharply on Friday afternoon following a massive sell-off in artificial intelligence chip stocks. The tech-heavy Nasdaq index closed down 4 percent, its biggest single-day drop in more than a year. The S&P 500 and Dow also fell 2.6% and 1.3%, respectively.
Economists initially predicted there would be about 80,000 new jobs and a steady unemployment rate of 4.3%. Employment figures for March and April were also revised to 29,000 and 64,000 respectively, an increase of 93,000 compared to the initial figures.
Employment growth was seen in the leisure and hospitality sectors; This increase was supported by 70,000 jobs in May, including 48,000 in food services and drinking venues. Employment in local government and health services also increased last month.
The new data from the Bureau of Labor Statistics is the latest in a series of reports pointing to strong hiring in recent months despite a struggling economy and a rise in inflation.
The labor ministry announced earlier this week that the number of jobs opened in April increased to 7.6 million, while there was little change in the number of people leaving their jobs, being laid off and being dismissed.
Private employers added 122,000 new jobs in May, according to payroll company ADP; This company found that employers of all sizes and in most industries are hiring, with the exception of the information and natural resource sectors.
ADP’s chief economist Dr. “Hiring in May was more broad-based than we have seen in the last few years,” Nela Richardson said in a statement. “The labor market continues to show steady momentum heading into the summer hiring season.”
Economists predict the Fed will keep interest rates steady at its June 16-17 meeting, but Trump and his advisers have made clear they expect Warsh to be receptive to ongoing calls for rate cuts.
“We now have a Warsh Fed,” U.S. treasury secretary Scott Bessent said at a news conference last week. “It’s a new day at the Fed… I had my first breakfast with Chairman Warsh this morning and I believe he will do the right thing to balance inflation and growth.”
Economists say even if the president supports a rate cut, it’s unlikely that a majority of the Fed’s 12 voting members would agree. At the Fed’s last meeting in April, only one member voted to lower the interest rate target range.
