Sunday, April 14, 2024

US Disappoints With Only 559000 Jobs In May

The United States created a total of 559,000 jobs in May while the unemployment rate dropped to 5.8%. Economists had expected at least 671,000 jobs to be created and the unemployment rate to stand at 5.9% last month.

In this way , unemployment fell by 0.3 percentage points since April and the number of unemployed fell by 496,000 people, to 9.3 million. These measures are down considerably from their recent highs in April 2020, but remain well above their pre-pandemic levels (3.5% and 5.7 million, respectively, in February 2020).

May’s disappointment came after April fell well below expectations , as the revised upward figure of 278,000 continued to fall far short of the initial estimate of one million people . If we take into account the combined reviews of March and April combined, it could be said that 27,000 more jobs were created than previously projected.

The labor participation rate varied little, standing at 61.6%, within the range in which it has remained since June 2020 and 1.7 percentage points below that registered before the pandemic. Last month around 16.6% of employees teleworked , down from 18.3% the previous month.

By sectors, leisure and hospitality generated 292,000 jobs , as more than 50% of the adult population has already received at least one dose of available vaccines and both state and federal governments relax restrictions related to the pandemic. That said, employment within these sectors is 15% below when compared to pre-Covid-19 levels, that is, at least 2.5 million more payrolls would have to be created.

In May, employment increased in public and private education , reflecting the resumption of face-to-face teaching. In this way, 53,000 jobs were added in local public education, another 50,000 in state public education and around 41,000 in private education.

Health and social assistance added 46,000 jobs while the manufacturing sector increased by 23,000 payrolls. The same figure generated by transportation and storage. Construction destroyed 20,000 jobs while payroll creation in retail and professional services showed little change.

Median hourly wage on private nonfarm payrolls rose 15 cents in May to $ 30.33, following a 21-cent increase in April.

These figures come after weekly claims for unemployment benefits fell for the fifth consecutive week between May 24 and May 28 to 387,000 claims. A new low since the pandemic began. That said, despite the decline in initial applications, the trend for continued applications continued to show elevated levels, justifying concern about Americans hesitating before returning to the job market .

Given the context of the labor market, the current situation would continue to justify the need to maintain stimulus from the Federal Reserve. The central bank of the United States buys 120,000 million dollars a month in debt (80,000 million dollars in Treasuries and 40,000 million dollars in assets backed by mortgages) in addition to keeping the price of money in a range of 0% and 0, 25%.

The rise in prices, which Jerome Powell, Fed Chairman, considers to be temporary, has raised doubts in the market. Despite the patience shown by the Federal Reserve to date, it is expected that at the end of August it anticipates its intention to begin reducing its asset purchases, something that could begin in the first quarter of next year.

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