After the strong April showing of 177,000 jobs added, well above expectations, the US economy has surprised on the strong side for the second straight month. Even when giving out mixed signals on economic health, the climate of the economic recovery, the labor market has stayed incredibly strong, with jobless claims hovering around 225,000. As the country approaches the May payrolls report, forecasters are predicting the economy has added just 130,000 new jobs. That would suggest continued pessimism across varied sectors of business and consumer confidence.
In April, employers created 177,000 jobs, well above analyst projections. This neck-snapping pace tells us that the labor market is doing well, despite those larger economic worries. This increase marks a significant achievement for the economy and illustrates a level of resilience that has persisted even as other indicators show signs of distress.
Jobless claims data has been steady too, around 225,000, indicating steadiness in the workforce. Continuing claims are level at about 1.9 million. This is a sign of stability, indicating that replacement job seekers are finding it increasingly easier to get back into the workforce. The blockbuster nature of these figures combine to create the heady feeling of a labor market on fire.
With the unemployment rate remaining at 4.2%. This stabilization is good news as it means that despite the economic contraction seen in the first quarter, there remains a strong foundation of employment. This stability is impressive indeed, considering the backdrop of much lower consumer confidence numbers. Recent surveys indicate that consumers are feeling less optimistic about the economic outlook, which could impact spending and overall economic growth.
Average earnings growth has tempered to 3.8%, tied with the lowest rate seen over the past half-year. This figure is well below such forecasts and adds to worries about stagnating wage growth as inflationary pressures continue to build on the economy. Stagnant wage growth is continually failing Americans. At the same time, weakening consumer confidence would be an additional blow to our economic growth in the years ahead.
So as the country looks ahead to the May payrolls release, economists are tentatively hopeful. Expectations for job additions are 130,000, a number that shows just how uncertain the state of economic conditions truly are. Despite this anticipated slowdown compared to April’s performance, experts suggest that the labor market’s resilience could provide a buffer against potential downturns in other sectors of the economy.
In recent months, leading business and consumer surveys have pointed to a growing pessimism about the state of the economy’s future. With the recent unexpected contraction of the US economy in the first quarter, these questions have been growing as we look ahead to different possible growth trajectories. Even still, analysts have cited the labor market’s robustness as a bright spot in the face of these headwinds.