The US extended a year-long streak of strong jobs growth in May, adding another 390,000 new jobs, the Department of Labor said on Friday.
The unemployment rate remained at 3.6% for the third month in a row, near a half-century low. The number of unemployed people was also essentially unchanged at 6 million.
The US economy has now added jobs for 17 consecutive months and employers are struggling to find enough workers. There were 11.4m open job positions in May, close to the record high of 11.9m open positions in April, and wages are rising as a result.
Over the past 12 months, average hourly earnings have increased by 5.2%, far stronger than the pre-pandemic gains but still below the annual rate of inflation which reached 8.5% in March. Wage gains appear to be slowing, rising by 0.3% from April and bringing the annual rate down from 5.5%.
While jobs growth has been strong there are still marked differences in unemployment by race. The white unemployment was 3.2%, almost half the 6.2% rate for Black Americans.
The latest jobs figures come as the Federal Reserve is struggling to curb soaring inflation, now running at highs unseen since the 1980s. The Fed announced its largest hike in interest rates in 22 years last month as it attempts to bring prices back down and the Fed chair, Jerome Powell, has signaled more rises are to come.
Michael Pearce, senior US economist at Capital Economics, said: “The better than anticipated 390,000 gain in non-farm payrolls adds to the signs that the economy is still strong while, amid a rebound in the labour force, wage growth is beginning to moderate. With wage growth still running well above rates that are consistent with the Fed’s 2% inflation target, however, that won’t stop the Fed from continuing to raise rates by 50bp [basis points] at the next meeting or two.”
