The U.S. economy added a solid 390,000 net new jobs in May 2022. The unemployment rate remained unchanged at 3.6%, nearly a 50-year low. Broad-based job gains (aside from retail), moderating wage growth, and labor force participation recovering – all these are signs the jobs recovery is in the home stretch, meaning that in the next few months employment will crest above pre-pandemic levels.
COVID “job deficit” continues to shrink
The three-month moving average of employment gains is around 400,000 – that is far from a recession. These gains occurred despite the Federal Reserve hiking interest rates amid elevated inflation. The “job deficit” shrunk further from its pre-COVID level – and now stands at 822,000. The jobs recovery is in the home stretch; it should be complete by sometime this summer.
Broad-based job gains, but retail is the laggard
Gains were broad-based across most major industries. Leisure and hospitality led the way with 84,000 new jobs. But while consumers are returning to restaurants and hotels, they’re not shopping like before. Retail stood out as the laggard in May, as the sector lost 61,000 jobs. Ecommerce remains a vital part of the economy despite the loosening of COVID restrictions and