What’s Going On Here?

Friday’s jobs report showed that the US added just 75,000 jobs in May – less than half the number expected.

What Does This Mean?

For sectors

• The healthcare sector nursed 16,000 new jobs;
• Professional and business services (like lawyers and researchers) added 33,000;
• Jobs in retail, manufacturing, and working for Uncle Sam didn’t grow by much;
• Nor did those in construction after building over 215,000 new roles in the last year.

For wages

• Average wages grew 3.1% higher than the same time last year – slower than in April and shy of forecasts.
• This probably wasn’t a total surprise: data showed that the private sector added only 27,000 jobs in May – the fewest since 2010 and well below the 185,000 expected.

Why Should I Care?

For markets: Get to work, Fed.

• The slowest rate of hiring in three months may suggest the economy is now losing steam. With the unemployment rate at a 50-year low, wage growth should be speeding up as companies boost remuneration to lure workers from their current jobs.
• It’s the US Federal Reserve’s job to keep both inflation and employment stable; Friday’s data may boost most investors, who think the Fed will now lower interest rates to sustain economic growth.

Inflation and unemployment is traditionally inversely correlated. Get to know more here!

For you personally: It’s not all about the money.

• US job confidence is at an all-time high – although job availability is now perhaps low.
• That could be down to a mismatch between what companies are offering and what workers want. I.e:
  • Millennials value flexibility over money;
  • 48% of baby boomers and 30% of millennials care more about a job’s purpose than its paycheck (which might partly explain lower-than-expected US wage growth).

Content source: Finimize. (2019) America Halves The Dream. Available from: https://www.finimize.com/wp/news/america-halves-dream/ [Accessed 15 June 2019]