Monday, 8 August, 2022

US continues to add jobs as wage gains slow

US continues to add jobs as wage gains slow

Popular News

WASHINGTON: US job gains continued in May but at a slower pace, and rapid wage increases cooled as well, a welcome sign for US policymakers trying to ease red-hot inflation.

President Joe Biden, who has been pummeled in opinion polls as prices have spiked, said the employment data released Friday showed the world's largest economy weathering the inflation surge while maintaining healthy growth, reports AFP.

"We've laid an economic foundation that's historically strong," Biden said in comments in his home state of Delaware, emphasizing the resiliency of the US economy despite rising consumer prices.

"Now we're moving forward to a new moment where we can build on that foundation -- build a future of stable, steady growth -- so we can bring down inflation without sacrificing all the historic gains we've made."

American employers added 390,000 jobs last month, the Labor Department reported, a sign of a slowdown in hiring but still a better-than-expected result amid the ongoing shortage of workers. Employers have struggled to fill open positions, which has pushed wages higher, and average hourly earnings rose another ten cents compared to April, to $31.95.

The pay rate is 5.2 percent higher over the last 12 months ended in May, but that is slightly slower than the 12-month increase posted in April, the report said.

That could be good news for the Federal Reserve, which has launched an aggressive campaign to raise interest rates to combat the highest US inflation in more than 40 years.

"Average hourly earnings growth remains moderate relative to last year," former White House economic advisor Jason Furman said on Twitter. "That's the most important number in this release for inflation and it's mostly reassuring."

Ian Shepherdson of Pantheon Macroeconomics noted that the annualized rate of increase in the latest three months was just 4.3 percent -- the smallest since April of last year.

"The downshift from the 6.1 percent peak in January is clear, and the rate will slow further," he said, which "will bring a sigh of relief at the Fed." The US central bank began raising the benchmark borrowing rate in March and has made clear the increases are likely to continue the rest of the year, including two big hikes in June and July that together would take the level to 1.75 percent from zero, where it sat throughout the pandemic.