Labor Market Is Not Buying Into Talk of a Recession
The latest US payrolls report showed that momentum is picking back up and that job gains are widespread, a scenario inconsistent with calls for a second-half downturn.
More than 60% of industries continue to add jobs.
Photographer: Jordan Vonderhaar/Bloomberg
The bears have been consistently early, and the latest US payrolls data shows that continues to be the case. The Labor Department reported Friday that US employers added 339,000 jobs in May, the most since January and a number entirely out of line with widespread predictions of an imminent recession. More than any recent statistic, this one should spur broad rethinking about the near-term prospects of the American economy.
Until recently, it appeared that the robust pace of payroll additions had been moderating — however slowly — under the weight of the Federal Reserve’s aggressive interest-rate increases in the past 13 months. But even that may no longer hold true. With the gangbusters payroll additions in May and the significant upward revisions to previous months’ data, the report showed that the labor market in aggregate isn’t even really cooling off anymore — let alone collapsing. The six-month moving average of monthly payroll gains rose for the first time since October 2022.