Roughly 4.3 million Americans quit or changed jobs in May, reflecting a job market where workers continue to have the upper hand. Overall hiring, meanwhile, slightly slowed, with businesses adding 6.5 million workers in May, compared with 6.6 million a month earlier. Layoffs, meanwhile, remained near record lows.
“This is not what a recession looks like,” said Nick Bunker, an economist at the jobs site Indeed. “Demand for workers might be stagnating, but it’s still at very elevated levels. The labor market is not signaling a recession.”
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Hiring remains healthy despite mounting signs of economic gloom. Inflation — which has lifted the price of gas, groceries and goods — is near 40-year highs. Consumer sentiment is at an all-time low. And more economists and forecasters are predicting a recession within the next year.
Those fears have ratted investors and taken a toll on financial markets. Oil prices plunged as much as 10 percent on Tuesday, with US crude prices falling below $100 per barrel for the first time in May. The stock market, meanwhile, continued to tumble after closing out its worst first-half of the year since 1970 before the July 4 holiday. Markets were down by late morning Wednesday, after the jobs report came out.
But the strong job market and low unemployment rate — at a pandemic low of 3.6 percent — have remained a source of optimism for economists and policymakers. Federal Reserve officials have routinely cited tight labor conditions as a key reason they feel comfortable hiking interest rates to cool the economy. The hope is that they can tamp down on inflation without sending unemployment soaring.
US employers added a blockbuster 390,000 jobs in May, following nearly one year of at least 400,000 new jobs per month.
Unemployment rate stays steady at pandemic low of 3.6 percent
The next big test comes Friday morning, when the Labor Department reports June employment figures. Although labor market growth is widely expected to moderate, a marked decline is unlikely.
“We’re hearing a lot about a looming economic slowdown, but someone forgot to tell the job market,” Bledi Taska, chief economist at Lightcast, a labor market data and analytics firm, said in an email. “Even if the economy settles from the pandemic shock waves, and slips into a recessionary period, the US will still likely have around 7 million job openings.”
The rapid rebound comes after more than 20 million people lost their jobs in the first months of the pandemic. Since then, US employers have tried to hire back many of those workers by offering higher wages and more flexible schedules. Some of the biggest hiring gains in recent months have been in professional and business services; leisure and hospitality; and trade, transportation and utilities.
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That trend continued in May, Labor Department data shows, with each of those industries adding at least 1 million new workers. However, some sectors, such as wholesale trade and the federal government, reported an increase in layoffs.
“Of course not all industries are doing the same thing,” said Julia Pollak, a labor economist at ZipRecruiter. “But we’re not seeing a general cooling in the job market when it comes to demand for workers.”
In Galveston, Tex., James Gonzalez says he’s all but given up on trying to find qualified truck drivers. For several months now, he’s been the lone driver at his company, Gonzalez Trucking, where employees typically make about $25 an hour.
“It’s so hard to find people — especially someone who knows what they’re doing,” he said. “I’ve been doing this for 20 years and can’t think of a time it’s been this tough.”
Hamza Shaban contributed to this report.