Job Gains Exceed Expectations Despite Fed’s Best Efforts To Cool Economy

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Jason Cohen Contributor
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The U.S. added 339,000 jobs in May, substantially more than economists expected, as the unemployment rate rose 0.3% to 3.7%, according to Bureau of Labor Statistics (BLS) data released Friday.

Economists had anticipated the country would add 190,000 jobs compared to 253,000 in April, and that unemployment would jump from 3.4% to 3.5%, according to Reuters. The Federal Reserve has attempted to cool the labor market in an effort to reduce persistent inflation.

At 3.7%, the unemployment rate remained in the range of 3.4-3.7% since March 2022, according to the BLS. Growth was led by 64,000 jobs added in the professional and business sector, and increases in the health care sector also contributed to job growth, with 52,000 jobs added.

“Most of the data from the regional federal reserve banks and private organizations show hiring continued last month, even without significant pay increases,” E.J. Antoni, research fellow for regional economics at the Heritage Foundation’s Center for Data Analysis, told the Daily Caller News Foundation. “Increasingly cash-strapped consumers are jumping into the labor market at any price.”

At the last Federal Open Market Committee (FOMC) meeting in May, the Fed increased its benchmark federal funds rate by a quarter of a percentage point, the 10th consecutive hike since March 2022. The Fed intends for the hikes to reduce inflation, as the central bank has repeatedly stated its goal is to bring it down to 2%. (RELATED: Labor Market Stays Hot Despite Fed’s Best Efforts)

WASHINGTON, DC – MARCH 10: U.S. President Joe Biden delivers remarks on the February jobs report as Chair of the Council of Economic Advisers Cecilia Rouse (L) and Assistant to the President & Director of the National Economic Council Lael Brainard (R) listen in the Roosevelt Room at the White House on March 10, 2023 in Washington, DC. Photo by Alex Wong/Getty Images)

“Reducing inflation is likely to require a period of below-trend growth and some softening in labor market conditions,” Federal Reserve Chairman Jerome Powell said after the March FOMC meeting. “Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run.”

The BLS data follows private payroll firm ADP’s surprisingly strong report Thursday, showing that jobs increased by an estimated 278,000 in May, led by a gain of 208,000 in the leisure and hospitality sector.

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