(CN) — American employers added 390,000 jobs in May as the unemployment rate stayed at a low 3.6%.
While last month’s increase marks a drop in hiring from the revised 436,000 jobs added in April, it still beat the Dow Jones estimate of around 328,000.
The U.S. economy is now just 822,000 jobs below its pre-pandemic level in February 2020, according to a Labor Department report released Friday morning.
Payrolls have grown by an average of 408,000 per month over the last three months, even with a pandemic-era low unemployment rate.
“Despite concerns about a slowing economy, employers continue to add jobs at a torrid pace,” said Nick Bunker, economic research director at Indeed Hiring Lab.
Wages are also up 5.2% from a year ago, with the average pay for American workers now standing at $31.95 per hour.
“Demand for workers is tremendously strong and it’s pulling more and more people back into work. The labor market will eventually slow down, but for now it’s still humming,” Bunker wrote.
Many worry the economy is headed for a recession amid high inflation and the Federal Reserve’s effort to stave off more inflation by raising interest rates. But at least as of last month, employers seem to be shrugging off those fears.
Leading the way in May hiring was the leisure and hospitality sector, which added 84,000 jobs, including 46,000 at food and drinking establishments. Hit hardest by the coronavirus pandemic, the industry is still down 1.3 million jobs compared to February 2020.
Professional and business services added 75,000 positions, continuing its streak of big gains. Employment in that sector is up 821,000 since the pandemic began.
Employers added 47,000 jobs in transportation and warehousing last month, while notable gains were also seen in construction (36,000), health care (28,000), manufacturing (18,000) and wholesale trade (14,000).
There were 61,000 fewer jobs in retail in May, pulled down by a payroll cut of 33,000 at general merchandise stores. Employment stayed about the same in the financial activities sector and other major industries.
In the public sector, state governments added 36,000 positions while there were 16,000 more jobs in local government and 5,000 at the federal level.
The 3.6% unemployment rate is the lowest since the start of the pandemic. It was at a 50-year low of 3.5% just before Covid-19 brought the economy to a standstill.
“The labor market doesn’t seem to be losing much steam. Employers are adding jobs at a very brisk rate despite the low levels of unemployment,” Bunker said.
He added, “When the labor market does start to slow down, hopefully it will do so after many more workers have already found jobs.”
President Joe Biden spoke at the White House on Friday morning to celebrate the jobs report and outline steps his administration is taking to lower costs for Americans.
“There’s no denying that high prices, particularly around gasoline and food, are a real problem for people,” he said. “But there’s every reason for the American people to feel confident that we’ll meet these challenges.”
The president said the progress made on the economy, and the labor market in particular, puts the U.S. in a strong position to combat inflation. He cited expert projections that say the American economy could grow at a faster rate this year than the Chinese economy, which he said hasn’t happened since 1976.
“We’ve laid an economic foundation that’s historically strong and 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 historical gains we’ve made,” Biden said. “And that’s what we’re beginning to see with today’s jobs report.”
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