U.S. employers added 390,000 jobs amid interest rate hikes

U.S. employment numbers continued their upward trend and showed robust pace during May. United States employers managed to add 390,000 new jobs in the last month. However, the economy witnessed a slightly slower pace of hiring compared to previous months. Moreover, the unemployment rate stood at 3.6%.

Fears amid inflation and interest rate hikes

The economists are considering May employment numbers very healthy. Although the Federal Reserve has increased the interest rate in wake of rising inflation. But the employment market has shrugged of fears regarding weakening economy and remained resilient. The employment gain for May is the lowest addition in jobs during the past twelve month. Yet, they are portraying a hopeful picture in terms of employment outlook. Moreover, the number is still better than the consensus of economists. Reuters conducted a survey with help of economists and they projected an addition of 325,000 jobs during May.

“The labor market seems to have shrugged off the headwinds buffeting the economy from higher inflation and interest rates. The labor market is heading toward complete recovery from the pandemic.” Sophia Koropeckyj, a managing director at Moody’s Analytics said in her statement. Moreover, Moody’s have forecasted a monthly job gains to fall under 300,000 jobs per month during second half of 2022. In addition, they are expecting the average monthly jobs gains around 150,000 per month in 2023.

Jobs losses in retail and automobile sector

All the employment sectors showed positive outlook during May 2022. However, the retail sector came out as an exception. The sector lost nearly 61,000 jobs during last month. Some large retailers like Walmart and Target have reported disappointing sales and earnings. Moreover, Walmart reduced their headcount through downsizing after claiming that they had over-hired. Automakers and their parts suppliers also lost 3,500 jobs. The auto sector companies had to temporarily shut down their plants due to chip shortage crisis.

84,000 new jobs in leisure and hospitality

Construction companies added 36,000 jobs depicting that the Americans are building new houses. Shipping and warehousing companies added 47,000 jobs. Whereas, leisure and hospitality sector managed to add 84,000 new jobs.

The addition of 390,000 jobs is far more than the typical gains in more normal times. During 2009 till 2019 the average monthly job gain was 183,000.

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