Economy is creating more jobs than expected, wages can’t keep up with inflation

(The Center Square) – The U.S. economy added 390,000 jobs in May, the Bureau of Labor Statistics reported on Friday, although a private report shows employers added far fewer jobs.

This BLS data on non-farm payrolls is better than experts’ forecast of about 328,000 new jobs. However, job growth slowed in May as the economy created fewer jobs than in previous months.

“Notable job gains were in recreation and hospitality, professional and business services, and transportation and warehousing,” BLS said. “Retail employment has declined.”

Economists expected an unemployment rate of 3.5%. The BLS puts the unemployment rate at 3.6%.

“In May, the unemployment rate was 3.6% for the third consecutive month, and the number of unemployed remained virtually unchanged at 6.0 million,” the BLS said. “These measures are little different from their values ​​in February 2020 (3.5% and 5.7 million, respectively), before the coronavirus (COVID-19) pandemic.”

Separately, an ADP Research Institute survey released on Thursday reported that private sector jobs rose by 128,000 last month, with small businesses actually employing 91,000 workers, indicating companies are still struggling to fill vacancies.

The BLS also reported wage gains of about 5.2% over the past 12 months.

“Over the past 12 months, the average hourly wage has increased 5.2%,” the BLS said. “In May, average hourly wages for private sector production and non-supervisory employees increased 15 cents, or 0.6%, to $27.33.”

Those wage gains, however, have not kept pace with inflation, which is rising at the fastest pace in decades. Over the last twelve months or so, energy costs have risen by around 30% and food prices have risen by nearly 10%, with the overall inflation rate well above the wage gain of 5, 2%.

Employment changes in May varied by industry, according to the BLS.

“Retail employment fell 61,000 in May, but is 159,000 higher than February 2020 levels,” the BLS said. “During the month, job losses occurred in general merchandise stores (-33,000), clothing and clothing accessories stores (-9,000), food and beverage stores (- 8,000), building and gardening material stores (-7,000) and health and health products stores. personal care stores (-5,000). In May, employment was little changed in the other major industries, notably information, financial activities and other services.

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