The job market slowed in May with 390,000 jobs added, the smallest growth rate in a year but still beating expectations and coming as President Joe Biden battles high inflation and increased interest rates.
The unemployment rate was unchanged and remained at 3.6%, the U.S. Bureau of Labor Statistics announced on Friday.
Economists predicted a number that would come in under the 428,000 jobs added in both March and April but the expected number for May was 325,000.
The 390,000 jobs beat that expectation. While it is considered healthy a healthy jobs number, it ends the record-breaking streak of 12 straight months in which job growth had topped 400,000.
The numbere is seen as a relection of a still-healthy job market despite concerns that the economy will weaken after the Federal Reserve raised a key interest rate in order to combat inflation.
President Biden is under intense pressure to do something about sky-high prices for food, gas and other goods ahead of the November election.
Economists say the slower job growth was expected now that the U.S. has recovered 95% of jobs lost during the first two months of the covid pandemic.
The labor market had seen a fierce competition for workers amid labor shortages, which ended up driving up wages, as workers were slow to return to jobs after the great shutdown.
But forecasters say the market has hit an equilibrium as the country recovers from the pandemic.
The job market slowed in May with 390,000 jobs added, the smallest growth rate in a year but still beating expectations
In what was seen as a prediction for the May jobs report, private payroll job growth slowed last month, according to the ADP National Employment Report published on Thursday morning.
Companies added 128,000 jobs in May, fall far short of the 300,000 increase that economists had forecast, according to Refinitiv.
The slowdown represented the worst month since April 2020, when workers were sent home as the pandemic took hold and the country went into a huge economic shutdown.
‘Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to prepandemic levels,’ said Nela Richardson, chief economist at the payroll firm, ADP.
‘The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.’
There were more encouraging data elsewhere.
The number of Americans filing fresh claims for unemployment benefits unexpectedly fell last week as demand for labor remained strong.
The weekly unemployment claims report from the Labor Department on Thursday, also showed state jobless benefits rolls declining to their lowest level since 1969 in the second-half of May.
The White House has pushed an economic message this week: On Tuesday President Joe Biden met with Treasury Secretary Janet Yellen, right, and Federal Reserve Chairman Jerome Powell, left, in the Oval Office
Meanwhile, voters are giving President Biden low marks for his handling of the economy. That disapproval is the major contributor to his low overall approval rating, which has Democrats feeling anxious ahead of the midterm election that will decide the control of Congress.
Republicans are favored to take back control of the House of Representatives come November.
Ahead of the election, Biden is under pressure to combat the record high inflation that has caused costs of groceries, gas and other goods to rise.
This week the administration has pushed an economic message, flooding cable TV shows with economic advisers to tout the low unemployment rate.
Biden met with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellin in the Oval Office last week.
In an attempt to rein in inflation, the Fed raised its short-term rate last month by a half-point, its biggest hike since 2000, to a range of 0.75% to 1%, causing borrowing costs to rise and housing sales to fall.
Two additional half-point rate increases are expected this month and in July.