May 2018 Jobs Report

According to the latest release from the Bureau of Labor Statistics, 223,000 new non-farm jobs were added to the economy in May. Economists predicted gains of 190,000 jobs, so this report exceeded their expectations by 33,000 jobs. The largest gains were seen in retail trade, health care and construction.

The unemployment rate dropped again to 3.8 percent, its lowest point since early 2000. Year-over-year, the unemployment rate has dropped 0.5 percent. Many predict that it will fall to 3.5 percent later this year, which would be the lowest it’s been since 1969.

There are more job openings right now than there have been in 20 years. Companies are still struggling to fill highly skilled roles in this labor shortage. They’re beginning to have to increase wages to get the candidates they want and to retain their current workforce. Although wage growth continues to be sluggish, it increased by 0.3 percent last month, exceeding the 0.2 percent forecast.

“It supports the idea that fiscal stimulus is having an impact and it can be effective,” said Josh Wright, the chief economist at iCIMS. “Whether or not it’s the right move now is something that we’ll continue to debate now and in the future, but it certainly looks like it’s feeding through.”

“The labor market is continuing its longest streak of job growth on record,” Martha Gimbel, director of economic research at jobs site Indeed.com, said. “This recovery is showing no sign of slowing down.”

Disposable personal income and spending have increased, too. This, combined with steady jobs gains and low unemployment, almost ensures a rate hike from the Federal Reserve. One is expected soon, with another to follow later in the year. This has helped steady Wall Street, which has been somewhat rocky due to trade tensions and other global issues.