Despite various economic challenges, job growth in the US climbed higher in May, indicating a strong labor market.
According to the Labor Department’s report on Friday, on a seasonally adjusted basis, US employers added 339,000 jobs which is an increase from a revised total of 294,000 in April.
Although one component of the report, based on a survey of households, showed a rise in the unemployment rate to 3.7 percent, from 3.4 percent, and a decrease of 310,000 in the number of people employed, as participation in the labor force was little changed.
The data presented a somewhat mixed picture, but the strong hiring numbers indicate that many US employers across different sectors remain keen to employ people in the face of high interest rates and economic uncertainty, particularly in the service sector where consumer demand has remained steady.
Considering the demand for workers among employers, many are now limiting headcounts through attrition instead of layoffs.
However, there is still uncertainty regarding whether businesses will continue to withstand any future economic challenges.
The Federal Reserve has raised interest rates over the past year to balance out the labor market and curb price increases, and the new jobs report has complicated the situation. Fed officials have indicated that the jobs report will factor in crucially as they decide whether to raise interest rates again during their next meeting scheduled for June 13 and 14.
The report was also affected by the recent debt ceiling deal approved by the Senate on Thursday, though economists anticipate the cuts and spending caps will have only a marginal impact on the labor market going forward.
