May Jobs Report

Amid record high inflation and recessionary fears, the American economy added 390,000 jobs in May. This outperformed the forecasts of economists, and took place against a low employment rate of 3.6%.

Axios recently reported on the “great re-shuffling” or how pandemic era changes and disruptions are also affecting employment patterns. Noting that the economy has attained a 96% recovery of pre-pandemic employment, the report also notes that the employment sector has been completely transformed:

• Construction, retail and transportation have been big gainers, while education, health care and government have lost the most positions.
• Employees are increasingly opting for remote positions, something that is not available in every industry.
• While the private sector has recovered 99% of lost positions, the public sector has only recovered a 58% of jobs lost, a stunning disparity.

Big Gains in Hospitality and Professional Services

The hospitality and professional services sectors showed the biggest gains in the latest jobs report:

• Employment in leisure and hospitality increased by 84,000 in May, as job growth continued in food services and drinking places (+46,000) and accommodation (+21,000).
• Employment in professional and business services rose by 75,000 in May. Within the industry, job gains occurred in accounting and bookkeeping services (+16,000), computer systems design and related services (+13,000), and scientific research and development services (+6,000).

Other Employment Gains

Several other sectors in economy grew in May:

• Transportation and warehousing added 47,000 jobs. Employment rose in warehousing and storage (+18,000), truck transportation (+13,000), and air transportation (+6,000). Employment in transportation and warehousing is 709,000 above its February 2020 level.
• Employment in construction increased by 36,000, following no change in April. In May, job gains occurred in specialty trade contractors (+17,000) and heavy and civil engineering construction (+11,000). Construction employment is 40,000 higher than in February 2020.
• Education employment increased by 36,000 in state government education and by 33,000 in private education.
• Health care employment rose by 28,000.
• Manufacturing employment continued to trend up in May (+18,000). Job gains occurred in fabricated metal products (+7,000), wood products (+4,000), and electronic instruments (+3,000).
• Wholesale trade added 14,000 jobs in May, including gains in durable goods (+10,000) and electronic markets and agents and brokers (+6,000).

Slight Adjustment in Retail Trade

There was an adjustment in retail in May with a decline of 61,000 in May. Note that employment in retail is now 159,000 above its February 2020 level.

Trends to Look for in the Job Market

Economists eyes are all on the inflation rate and the falling stock market, seeing it as potentially a sign of an upcoming recession. A recession may cool off spending on both major expenditures like housing and also smaller discretionary purchases in terms of beauty, fashion, and eating out.

Catch Up With Previous Jobs Reports

• Big month of growth in April
• March’s strong growth
• February’s blockbuster growth
• January’s strong growth despite Omicron
• Promising news for hospitality in December
• November’s mixed picture
• October’s robust gains
• A slower-than-expected report in September
• The summer‘s roaring recovery trajectory
• Better than expected growth in June, especially in travel
• Strong signs of recovery in May
• An anemic April jobs report