The U.S. labor market was firing on all cylinders in May: the unemployment rate fell to an 18-year low, employers added jobs at a faster pace and wages modestly improved.
The unemployment rate ticked down to a seasonally adjusted 3.8%, matching April 2000 as the lowest reading since 1969, the Labor Department said Friday. Nonfarm payrolls rose a seasonally adjusted 223,000 in May, a jump from gains from March and April. Average hourly earnings ticked up to a 2.7% from a year earlier—and raises were even stronger for nonmanagers.
“It’s pretty hard argue that the labor market is anything but right in the sweet spot,” said Dan North, chief economist at Euler Hermes North America. “There is tremendous demand for labor right now.”
U.S. employers have added to payrolls for 92 straight months, extending the longest continuous jobs expansion on record. And those gains are extending to all corners of the labor market.
The unemployment rate for women, 3.6% last month, was the lowest since 1953, when far smaller share of women sought jobs. The jobless rates for blacks, Latinos and those without high-school diplomas are trending near record lows.
A tighter labor market should also produce better wage growth, but overall gains have remained modest. Average hourly earnings for all private-sector workers increased 8 cents last month to $26.92.
Wages for nonsupervisor workers are rising at a faster rate than overall wage increases for the first time since 2014. The nonsupervisor increase, 2.8% in May from a year earlier, was the best annual gain since mid-2009, when the recession just ended.
Still, in April 2000 wages for those workers rose 3.9% from a year earlier.
“The tight labor market is putting employers under enormous pressure to invest as much as necessary to retain their best employees and attract the best talent,” said Rebecca Henderson, chief executive of employment firm Randstad Sourceright.
SOURCE: Eric Morath
The Wall Street Journal