The job market slowed in May with 390,000 jobs added, the smallest growth rate in a year, but still beat expectations and is coming as President Joe Biden battles high inflation and rising interest rates.
The unemployment rate was unchanged at 3.6%, the US Bureau of Labor Statistics said on Friday.
Economists were forecasting a figure that would be below the 428,000 jobs created in both March and April, but the expected figure for May was 325,000.
The 390,000 jobs exceeded this expectation. Although the number of healthy jobs is considered healthy, it ends a record 12 consecutive months of job growth exceeding 400,000.
The figure is seen as a reflection of a still healthy job market despite fears the economy will weaken after the US Federal Reserve hiked a key interest rate to fight inflation.
President Biden is under intense pressure to do something about sky-high prices for food, gas and other commodities ahead of the November election.
Economists say the slower job growth was now expected as the US has regained 95% of the jobs lost in the first two months of the Covid pandemic.
The labor market has faced fierce competition for labor amid labor shortages, driving up wages as workers have been slow to return to work after the major shutdown.
But forecasters say the market has reached equilibrium as the country recovers from the pandemic.
The job market slowed in May with 390,000 jobs added, the slowest growth rate in a year but still ahead of expectations
According to the ADP National Employment Report, released Thursday morning, private hire job growth slowed last month, which was seen as a prediction for the May jobs report.
According to Refinitiv, companies added 128,000 jobs in May, well short of the 300,000 increase economists had forecast.
The slowdown represented the worst month since April 2020, when workers were sent home as the pandemic took hold and the country went into a huge economic shutdown.
“Against a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels,” said Nela Richardson, chief economist at payroll firm ADP.
“Job growth from new hires has slowed across all sectors, while small businesses remain a concern as they struggle to keep up with larger firms that have been booming of late.”
Elsewhere, there was more encouraging data.
The number of Americans filing new jobless claims fell unexpectedly last week as demand for labor remained strong.
The Labor Department’s weekly jobless report on Thursday also showed that state jobless payrolls fell to their lowest level since 1969 in the second half of May.
The White House broke an economic message this week: President Joe Biden met with Treasury Secretary Janet Yellen (right) and Federal Reserve Chair Jerome Powell (left) in the Oval Office on Tuesday.
Meanwhile, voters give President Biden low marks for his handling of the economy. That disapproval is the main reason for his low overall approval rating, which has Democrats concerned ahead of the midterm elections that will decide control of Congress.
Republicans are favored to regain control of the House of Representatives in November.
Ahead of the election, Biden is under pressure to fight record-high inflation that has pushed up the cost of food, gas and other commodities.
This week the government sent out an economic message, flooding cable TV shows with economic advisers to promote the low unemployment rate.
Biden met with Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellin in the Oval Office last week.
In a bid to curb inflation, the Fed last month raised its short-term interest rate by half a point, the largest hike since 2000, to a range of 0.75% to 1%, leading to rising borrowing costs and falling home sales.
Two more half-point rate hikes are expected this month and in July.