Unemployment increased to 4% in May. (iStock)
The U.S. added 272,000 jobs in May, a higher number than the average monthly gain of 232,000 jobs seen in the last year, the Bureau of Labor Statistics reported in its Employment Situation summary.
Unemployment ticked up slightly from 3.9% to 4.0%. Compared to last year, the unemployment rate hasn’t changed substantially. Last year, in May, the jobless rate was 3.7%.
Several industries led the growth in jobs. Health care and government jobs increased by the most. The hospitality industry and professional, scientific and technical services also saw an increase in open positions.
An additional 68,000 jobs were added in the health care sector, which closely follows the average 64,000 jobs added each month within the last year.
Government jobs grew by 43,000 positions, a little lower than the average monthly growth of 52,000 jobs seen in the last 12 months. The leisure and hospitality industry added a similar 42,000 jobs in May.
Professional, scientific and technical services added 32,000 jobs in May, much higher than the average monthly gain of 19,000 over the prior 12 months.
Certain industries did see some job losses, mainly in department stores where open positions fell by 5,000. The furniture and home furnishings industry also struggled in May, losing 4,000 jobs. Other industries such as mining, construction, manufacturing and transportation had virtually no changes in their job numbers.
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US consumers aren’t spending as much on nonessentials
Although more jobs were added in May, optimism around spending is still declining. Many consumers planned to spend less on nonessentials like travel and hospitality, a McKinsey study found.
The study specifically predicts that the biggest cutbacks will be on international flights, hotel stays and cruises. Home-related purchases are also likely to go down. Survey respondents planned to reduce their spending on furniture and décor.
Gardening supplies was the one category consumers expected to spend more on, unsurprising with the arrival of spring and summer.
Fewer consumers across all income and age groups said they planned on splurging in the next three months. Gen Zers had the highest rate of respondents willing to splurge on purchases. About 63% of Gen Zers said they would spend more frivolously compared to 50% of millennials, 35% of Gen Xers and 19% of baby boomers.
The areas where all generations plan to splurge are groceries, personal-care items, vehicles and household essentials.
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Economic confidence continues to fall
Confidence in the current economy is waning as of May. Many Americans still fear a recession in the aftermath of the pandemic. The Gallup Economic Confidence Index, which measures how Americans view the current economy, registered -34 in May, dropping from -29 in April.
May’s number is inching closer to the lows seen in November. In November, the index sat at -40 and rose to -20 in March.
Only 22% of Americans describe the current U.S. economy as being in excellent or good condition. This is the lowest percentage since December.
On top of the general economy, the other problems deemed important by U.S. adults include the state of the government and immigration. About 21% of adults thought government issues were the most important problems to address, while 18% said immigration and 17% said the economy. Additionally, 12% also cited inflation as an important issue.
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