US companies in May added the fewest jobs since the pandemic recovery began—this despite a near-record level of job openings. Business payrolls increased by only 128,000 last month, held back by a decline in small firm employment. US stocks however snapped a two-day slide to rally ahead of Friday’s non-farm payroll report, as traders expect to see cooler labor demand, something the Federal Reserve might consider good news in its fight against inflation. Here’s your markets wrap.
Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.
While the composition of U.S. employment has shifted in the last two years, the US has now recovered 95% of jobs lost during the first two months of the pandemic. And the unemployment rate is now within striking distance of matching the lowest level since 1969. The likely moderation of US job growth in coming months will reflect a combination of hiring challenges in a remarkably tight labor market. Some sectors, like travel and entertainment, are expected to make up a large share of aggregate growth as Americans allocate more discretionary income to services. “It’s less about filling the hole that was created from the pandemic and it’s more about finding this new equilibrium,” said Michelle Meyer, US chief economist at Mastercard Economics Institute. It’s “the right matching between where the jobs are and where the people are in terms of looking for those jobs.”