3 things to know about the May 2018 jobs report
The unemployment rate dropped to 3.8 percent in May - the lowest it's been since April 2000.
The U.S. economy added 223,000 jobs in May, considerably higher than the median estimate of 190,000, according to Bloomberg.
Here are some of the highlights from the Bureau of Labor Statistics report.
1. Unemployment is at an historic low
The unemployment rate fell slightly to 3.8 percent from 3.9 percent last month.
Marketwatch: “The unemployment rate fell again to the lowest level since April 2000 as more people found work. The last time the jobless rate was even lower was in 1969.”
Reuters: “U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8 percent, pointing to rapidly tightening labor market conditions, which could stir concerns about inflation.”
2. Wages may be inching up
Low unemployment is usually expected to lead to increased wages as the labor market tightens and employers are forced to compete more to attract fewer candidates. This trend hasn’t held in recent jobs reports, but there are signs in this month’s report that wage growth is getting back on track.
NBC News: “Wage growth remained a sticking point in the mainly positive jobs report, with hourly pay up by only 2.7 percent year on year. But with inflation at just over 2 percent, workers are barely feeling any net increase. The current wage growth rate is almost half what would be expected with an unemployment rate this low.”
Business Insider: “Wage growth, which has been depressed during most of this economic recovery, increased by more than expected last month. This signals that the tighter labor market is prompting employers to pay workers more. Average hourly earnings rose 0.3% month-on-month (0.2% forecast) and 2.7% year-on-year (2.6% expected).”
3. Interest rates will probably climb
The modest increase in wages has many analysts suggesting the Federal Reserve will increase interest rates – though how many more times this year remains to be seen.
Marketwatch: “While more Americans sure could use a bigger raise, the relatively slow growth in wages does have a plus. Inflation is still rising slowly enough that the Fed doesn’t have to rapidly jack up interest rates. [...] The Fed is still widely expected to raise rates in June, but it might only raise them once more in 2018 barring a dramatic upturn in inflation that seems unlikely.”
Bloomberg: “The report reinforced expectations for Federal Reserve policy makers to raise interest rates when they meet June 12-13, and spurred investors to increase bets on two more hikes this year after that, rather than one.”
Reuters: “After the employment report, traders increased bets that the Fed would raise interest rates four times this year. U.S. Treasury yields rose and the dollar gained versus a basket of currencies. Stocks on Wall Street were trading higher.”
As you look for your next job, use these negotiation strategies to make sure you’re not leaving any money on the table when you land your next job.