The US economy added 559,000 jobs in May as unemployment fell to 5.8%

The US economy created 559,000 jobs in May as the unemployment rate fell to 5.8 percent, indicating that the labor market has regained some strength amid concerns that a labor shortage is hampering the recovery.

The US Department of Labor’s non-farm payroll data on Friday was slightly worse than economists’ expectations of around 650,000 jobs, but was an improvement from the 278,000 jobs posted in April.

The numbers were released at a pivotal moment for the US economy, with growth rebounding strongly thanks to the lifting of pandemic restrictions across the country and massive fiscal stimulus, with a wave of… economic inflation.

Meanwhile, companies have been complaining that they are struggling to rehire workers to meet rising demand, prompting them to raise wages in a bid to attract new employees.

The drop in the unemployment rate, from 6.1 percent in April, brought it below 6 percent for the first time since the pandemic began, but labor force participation has fallen, suggesting there is still some reluctance among Americans to rush back into the pandemic. . Man power.

The jobs report for April was well below economists’ expectations and well below the pace of job creation in March, raising fears of a widespread outbreak. labor shortage It could permanently affect the economic recovery of the United States.

That weakness raised the stakes for the May report, which has been closely watched for evidence that the hiring slowdown in April was a warning sign of a broader problem — or a temporary phenomenon linked to the continuing impact of the virus and school and government closures. Transfers that will eventually be resolved.

The pace of employment in the leisure and hospitality sector fell from 328,000 in April to 292,000 in May, but other sectors including transportation, warehousing, manufacturing, healthcare and temporary jobs posted improvements.

The May jobs report comes as policymakers at the Federal Reserve prepare to open a discussion about easing some of the massive monetary stimulus that has been pumped into the US economy since the start of the pandemic.

The central bank has been buying $120 billion in assets every month since last year, and monetary policymakers have indicated the intent to do so start talking About “downsizing” the pace of bond buying – although they didn’t say when they expected this process to start.

“We’ve been on a roller coaster ride as far as economists’ estimates go,” said Emily Rowland, chief investment strategist at John Hancock Investment Management. “There appears to be little air in the job recovery and it may take longer than expected for the labor market to recover.”

Rowland said the “disappointing” jobs report reinforces the Fed’s case for being patient when it comes to removing its policy support.

“Today’s jobs report provides evidence that the Fed was right in its assessment that there is a way to go until we see maximum employment,” she said.

US government bonds rose after a weaker-than-expected jobs report, with the sell-off reversing in New York morning trade on Friday. The benchmark 10-year note was down more than 0.02 percentage points on the day to trade around 1.6 percent.

Five-year Treasury yields rose more sharply, with yields falling by more than 0.03 percentage points to 0.8 percent, while two-year Treasuries, which are more sensitive to monetary policy changes, settled at 0.15 percent.

The Biden administration was by surprise and Put on the defensive By the April slowdown, Republicans questioned the effectiveness of her economic policies. The White House will cheer for the recovery in employment in May.

US President Joe Biden is expected to speak about the data from Rehoboth Beach, Delaware, later Friday morning.

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