Image Source: The Epoch Times
According to the most current statistics updates, US employers added at least 390,000 new positions in May, exceeding the predicted threshold.
Despite the fact that May’s increase was the smallest in a year, the US Labor Department’s result exceeded experts’ projections for a 325,0000 increase in new employment by the end of the month. The US unemployment rate has maintained at 3.6 percent for the third month in a row.
Experts are keeping an eye on the job market in the world’s largest economy as rapidly rising prices raise fears of a future downturn.
In recent weeks, a number of several companies have announced plans to reduce or stop hiring. Walmart and Amazon, among other retail behemoths, have admitted to hastening their recruiting processes early in the year, resulting in decreased profits as rising prices proved more challenging to pass on to customers.
Meanwhile, Tesla is said to suspend hiring and warn that up to 10% of its salaried employees may be laid off. Elon Musk, the CEO of Tesla, expressed his discontent with the economy in a memo to employees obtained by Reuters.
The mood of consumers and financial markets has recently sunk. The annual inflation rate in the United States hit 8.3 percent in the year ended in April, a slight decrease from the rate recorded in March but the highest since 1981, according to data.
Job growth in May remained constant but at a slower rate than the previous year, according to analysts. On the other hand, experts have attributed the current delayed hiring to high costs caused by the spike in energy prices brought on by the Ukraine conflict.
Ian Shepherdson, the head economist of Pantheon Macroeconomics, forecasts that employers would cut back on hiring in anticipation of consumers cutting down on spending.
Many economists projected that job growth would slow after months of exceptionally strong gains. According to the Labor Department, employment in the United States essentially returned to pre-Covid-19 epidemic levels in March 2020.
With 84,000 new employment gained last month, the leisure and hospitality sector, which is still recovering from significant cuts imposed during the Covid restrictions, saw the most job growth. Retail payrolls fell by 61,000 jobs in February 2020, although the total number of employees is still higher than it was before the pandemic.
Following a year of rapid growth, US President Joe Biden announced on Friday that the economy was entering a “new period of calm, steady growth” and that Americans could “expect to see greater moderation.”
In terms of monthly employment numbers, Biden said that the United States is unlikely to experience the same kind of blockbuster reports in 2022 as it has in the past. He does, however, express his delight at how consistent the gains have been and how this stability has left the US in a solid position to cope with inflation.
When challenged about Mr. Musk’s comments, Mr. Biden pointed out that other companies, such as Ford, have announced intentions to hire thousands more people as they invest in electric vehicles.
He remarked, “I suppose he’ll have a lot of luck on his journey to the moon.”
As employers compete for employees, pay has been rising at a faster rate than it has in years. In the United States, the average hourly wage rose 5.2 percent to $31.95 (£25.50) last month, compared to a year ago. Pay growth, on the other hand, was lagging behind rising living costs and decreased in May for the second month in a row.
The US Federal Reserve is raising interest rates, as do other central banks worldwide, to combat inflation. These acts frequently hinder economic growth by increasing borrowing costs and decreasing demand.