The unemployment rate rose to 4% in May. (iStock)
The U.S. added 272,000 jobs in May, surpassing last year’s average monthly gain of 232,000, the Bureau of Labor Statistics said. Employment Overview.
The unemployment rate increased slightly from 3.9% to 4.0%. Compared to last year, the unemployment rate has not changed significantly. The unemployment rate in May last year was 3.7%.
Several industries led the job growth. Health care and government employment saw the largest increases. Hospitality and professional, scientific and technical services also saw increases in job openings.
The health care sector added 68,000 jobs, nearly matching the average of 64,000 jobs added each month over the past year.
Government employment increased by 43,000, slightly lower than the average monthly increase of 52,000 over the past 12 months. The leisure and hospitality industry added a similar 42,000 jobs in May.
The professional, scientific and technical services sector added 32,000 jobs in May, well above the average monthly gain of 19,000 over the past 12 months.
Some industries were trending down in employment, primarily in department stores, where job openings fell by 5,000. The furniture and home goods industry also struggled in May, losing 4,000 jobs. Other industries, including mining, construction, manufacturing and transportation, saw little change in employment numbers.
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American consumers are spending less on non-essential items
Despite the employment gains in May, optimism about spending remains on the decline as many consumers planned to cut back on non-essential spending, such as travel and hospitality. According to a McKinsey study.
The survey predicts that the biggest cuts will be made to international flights, hotel stays and cruise travel. Home-related purchases are also likely to decline, with survey respondents planning to cut back on spending on furniture and decorations.
Gardening supplies were, unsurprisingly, the only category in which consumers expected to increase spending with the arrival of spring and summer.
The number of consumers who plan to splurge in the next three months fell across all income and age groups, with Gen Zers most likely to say they plan to splurge on purchases: About 63% of Gen Zers said they plan to splurge more, 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, cars and household essentials.
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Economic confidence continues to decline
As of May, confidence in the current economy is fading, with many Americans still fearing a recession due to the pandemic. Gallup Economic Confidence IndexAn index measuring how Americans view the current economy fell to -34 in May from -29 in April.
The May figure is inching closer to the November low, when the index was -40, after rising to -20 in March.
Just 22% of Americans rate the current U.S. economy as extremely good or good, the lowest percentage since December.
In addition to the economy in general, other issues U.S. adults consider important include the state of government and immigration. About 21% of adults believe the most important issue that needs to be addressed is government issues, followed by 18% who say immigration and 17% who say the economy. Additionally, 12% also cite inflation as an important issue.
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