Continuing a string of 29 consecutive months of jobs growth and defying predictions of a sharper slowdown in 2023, the Bureau of Labor Statistics (BLS) posted a non-farm payroll increase of 339,000 in May 2023. This increase was in line with the average monthly gain of 341,000 over the prior 12 months.
Beating analysts’ expectations, today’s data will fuel discussions about the underlying strength of the economy in the face of federal reserve efforts to tame inflation. The job market added more positions in recent months than previously thought, as well. March and April’s totals were both revised upward for a net gain of 93,000 jobs.
The unemployment rate increased by 0.3 percentage point to 3.7 percent in May, within the range of 3.4 percent to 3.7 percent over the past 14 months. Unemployment among the college educated labor force was up slightly but still remains at what is essentially full-employment at 2.1 percent.
“Today’s report by the BLS continues to indicate a resilient U.S. jobs market in spite of economic headwinds. Executive recruiters throughout our Network of over 200 offices report the same talent-demand resiliency in most geographic areas and in most industry sectors. While our talent advisors remain vigilant for shifts in hiring demand, a key concern has been balancing many clients’ desires to require employees to be in the office full-time versus the insistence by many talented executive, technical professional and managerial players to have flex-work arrangements,” noted Nancy Halverson, senior vice president field operations MRINetwork. “Our recruiters recognize that hybrid work arrangements are becoming a standard part of the new professional work environment. We see our role as a broker to balance the flex-work expectations of transformative talent with the increasing desire of clients to maximize in-office attendance. We have found that clients can maintain, and in many cases improve, productivity and enhance an enduring corporate culture with a well-defined and fairly implemented hybrid work policy.”
As noted by CNBC’s Jeff Cox, The Federal Reserve’s May Beige book issued Wednesday noted that “wages grew ‘modestly’ which was in line with the rest of the Beige Book observations had about the jobs economy. Overall, the labor market continued to be strong, with contacts reporting difficulty finding workers across a wide range of skill levels and industries.”
Wall Street Journal reporter Gabriel T. Rubin provided perspective on today’s BLS report noting, “Some sectors such as tech, real estate and finance have shown some signs of stress. High-profile companies such as Facebook parent Meta Platforms, Goldman Sachs Group and Grant Thornton recently moved to cut jobs. The overall layoffs have remained low, and job openings ticked up in April, the Labor Department said. Workers, especially in tech, have largely been able to find new jobs quickly, although a new position might be less lucrative or at a company with less cachet.”
Providing a summary of the BLS data, Reuters business reporter Lucia Mutikani observed, “The report indicated the labor market remained strong and offered more evidence that the economy was far away from a dreaded recession, though more pockets of weakness are emerging. Despite massive layoffs in the technology sector after companies over-hired during the COVID-19 pandemic and the drag from higher borrowing costs on housing and manufacturing, the services sector, including leisure and hospitality, is still catching up after businesses struggled to find workers over the last two years.” She added, “Pent up demand for workers was underscored by Labor Department data this week showing there were 10.1 million job openings at the end of April, with 1.8 vacancies for every unemployed person.”
In May, professional and business services added 64,000 jobs, following an increase of similar size in April. Employment growth continued in professional, scientific, and technical services, which added 43,000 jobs in May.
Healthcare added 52,000 jobs in May, similar to the average monthly gain of 50,000 over the prior 12 months. In May, job growth occurred primarily in ambulatory healthcare services (+24,000) and hospitals (+20,000).
Employment in leisure and hospitality continued to trend up in May (+48,000), largely in food services and drinking places (+33,000). Leisure and hospitality had added an average of 77,000 jobs per month over the prior 12 months.
In May, construction added 25,000 jobs, including 11,000 jobs in heavy and civil engineering construction. Over the prior 12 months, construction had added an average of 17,000 jobs per month.
Employment in transportation and warehousing increased by 24,000 in May. Transit and ground passenger transportation added 12,000 jobs, offsetting a decrease in the prior month.
Overall employment was little changed over the past month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; information; financial activities; and other services.
“Flex work models are here to stay in most industry sectors. The ratios of off-site and on-site work will shift as hiring demand varies in a dynamic economic environment. We urge clients to remained focused on finding and hiring the best talent as they define the best flex models to align with their corporate culture. It’s critical to not swing so far on pendulum that you are restricting your from attracting and growing the best talent for the role,” added Halverson.