Side view of young businesswoman climbing stairs to success on concrete wall background. Leadership … [+]
OK, so pundits were finally getting the picture, predicting healthy job creation for May, as opposed to mild gains they’ve been predicting all along – and then acting surprised. So, since Wednesday, the predictions started rolling in at a pretty consistent 190,000 or so.
Would have been acceptable, no? Well, how’s 339,000? Not enough, actually, as the figures for March and April were revised upwards by 93,000, putting the market 431,000 jobs ahead of where we thought it would be just 24 hours ago.
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High-level, uncompromising job growth
This would have been big news if the previous months – or even three years – had shown weakness. But coming off 28 consecutive months of powerful, all-inclusive gains, and almost everyone holding their breaths in anticipation of a collapse or, at least a major slowdown, along comes this eye-opening month #29. Inflation be damned. Interest rates be damned. Debt ceiling shenanigans be damned. May continued the job market’s parade.
Why did unemployment rise?
Life isn’t perfect, though, and there are a few matters that should catch our attention but in no way cause alarm. For instance, the unemployment rate jumped from 3.4% to 3.7%. That’s significant but easily understood, for a few reasons. First, workers who were previously not looking for jobs have re-entered the workforce, although they all haven’t landed jobs. Overall, that’s a sign of spreading confidence.
Second, companies and workers alike are adjusting to the shifting of jobs, namely, back to the office (either part or full time).
Job growth would have been higher, but…
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Third, the big culprit remains the tech sector, which has laid off more than 201,000 workers so far in 2023, a natural reaction to – and readjustment from – the gross over-hiring they did during the pandemic when everyone thought the whole world was going permanently virtual. If that doesn’t make the case for more deliberate thinking and planning, at least it explains the current bloodletting in tech.
Other than that, job creation was strong across most sectors: professional and business services (64k), government (56k), health care (52k), leisure and hospitality (48k), construction (25k), transportation and warehousing (24k), and social assistance (22k). Employment was little changed over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; information; financial activities; and other services. If my bloodwork report looks like that next week at my annual wellness exam, I’ll be a happy man.
While all that’s been going on, wages rose again, with average hourly earnings for all employees up 0.3%, to $33.44 – not as strong as it has been, but up nonetheless – again. However, over the past 12 months, average hourly earnings have increased by 4.3%.
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A word about wage rises. A year ago, this 4.3% was only 47% of the inflation rate. But with wage rate rises remaining steady and inflation now at 4.9%, wages are no rising at 88% of inflation. It will be only a matter of months, if that, for wage increases will be at or above 100% of inflation. These currents and crosscurrents could easily have disrupted a weaker job market, but not this one, further proof of the market’s strength and further support f y ongoing assessment that this is th greatest job market we’ve ever seen.
I don’t say that lightly. Contrarily, I say it with gravity of thought. I’m an independent career coach and have been coaching people from the boardroom to the mailroom, and from their teens to their eighties – a total of more than 7,000 in my 26 years at this. I’ve seen some of the highest highs, lowest lows, and wildest swings in job market history.
So I’ll say it again.
Until further notice, we continue to be in the greatest job market in history.
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