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US Adds 390,000 Jobs In May: 'Little Solace In These Numbers'

Stock Markets Jun 03, 2022 16:40
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© Reuters. US Adds 390,000 Jobs In May: 'Little Solace In These Numbers'

The SPDR S&P 500 ETF Trust (NYSE: SPY (NYSE:SPY)) traded lower by 1% Friday morning after the Labor Department reported strong U.S. jobs market numbers from May.

The U.S. added 390,000 jobs in May, beating consensus economist estimates of 325,000 jobs. The U.S. unemployment rate remained at 3.6%, slightly missing the 3.5% level economists had projected. The labor participation rate increased 0.1% to 62.3% and remains below its 63.4% pre-pandemic rate in February 2020.

Wages were up 5.2% from a year ago and by 0.3% from April.

The Labor Department also revised March's total job growth lower by 30,000 jobs to +398,000 and April's job growth higher by 8,000 jobs to +436,000. The combined revisions totaled 22,000 fewer jobs.

The leisure and hospitality industry led the job creation in May, adding 84,000 positions. Unfortunately, employment in the leisure and hospitality industry is still down by 1.3 million jobs since February 2020.

Related Link: 3 Reasons The S&P 500 May Avoid A June Swoon

Voices From The Street: Jeffrey Roach, Chief Economist for LPL Financial, said the labor market is tight and job growth remains stable.

"Therefore, the Federal Reserve can continue to tighten financial conditions and remove the historic level of accommodation in the markets," Roach said.

Bryce Doty, senior vice president at Sit Investment Associates, said the uptick in labor participation was the highlight of the report.

"The bad part is that we still need millions more working to reduce the pervasive shortages driving inflation," Doty said.

Bill Adams, Chief Economist for Comerica Bank, said the report likely confirms the U.S. economy was "not in a recession" during the spring after GDP declined in the first quarter.

"With nearly two job openings for every active jobseeker, Americans looking to supplement incomes are able to find work to do so," Adams said.

Joseph Brusuelas, principal and chief economist for RSM US LLP, said the combination of robust hiring and rising wages will support spending and help the U.S. avoid a recession for now.

"For now, gasoline and food costs continue to rise, and Americans will find little solace in these numbers in contrast with forward looking investors, policymakers and economists that will," Brusuelas said.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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US Adds 390,000 Jobs In May: 'Little Solace In These Numbers'
 

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