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Economic News

United States: Another Hot Jobs Report

June 2, 2023
Francis Généreux
Principal Economist


  • According to the establishment survey, the US economy added 339,000 jobs in May after gains of 294,000 (revised from 253,000) in April and 217,000 (revised from 165,000) in March.
  • Payrolls grew by 25,000 in construction, but shrank by 2,000 in manufacturing.
  • Private sector services added 257,000 jobs after an increase of 225,000 in April. Employment rose by 11,600 in retail, 33,100 in food services and drinking places, and 24,200 in transportation and warehousing. Professional services added 64,000 jobs. 97,000 positions were created in private education and health services, and 56,000 were added in government.
  • Average hourly earnings rose 0.3% in May after increasing 0.4% in April. Year-over-year, they were up 4.3% in May compared to 4.4% in April. Average weekly hours fell to 34.3, the lowest level since the start of the pandemic.
  • The unemployment rate saw its largest increase since November 2010 excluding the spikes in March and April 2020. It jumped from 3.4% to 3.7%, a rate last seen in October 2022. According to the household survey, employment was down 310,000 while the labour force grew by 130,000.


The US labour market was surprisingly strong again in May. It added 339,000 jobs, far more than the 195,000 forecasters had predicted. And that's on top of sizeable upward revisions to the previous two reports (+52,000 for March and +41,000 for April). A total of 1,570,000 jobs have been created so far this year, a figure that doesn't square with an economy slowing under the weight of higher interest rates and tighter credit conditions.

May's employment gains were also fairly broad-based across sectors, with little obvious weakness. 60.2% of the 250 sectors surveyed reported expanded payrolls on the month, the highest level since January.

The only signs of weakness were the drop in hours worked, the rise in the unemployment rate, and job losses in the household survey. But that survey is much more volatile than the establishment survey. It has a margin of error of ±600,000 jobs versus ±130,000 for the establishment survey. That means it'll take more than one weak month to convince us a real change is afoot.



The US labour market has been truly resilient. This poses a major challenge for Fed officials who were leaning toward pausing interest rate hikes in the hope that job creation, wages and core inflation would eventually moderate.