The U.S. economy added 272,000 jobs in May, and the unemployment rate ticked slightly up to 4 percent, according to new Labor Department data released Friday.
The May jobs report was far hotter than the expectations of economists, who projected a gain of 185,000 jobs and no movement from the April jobless rate of 3.9 percent.
The slight increase in the jobless rate, however, ends the longest streak of sub-4 percent unemployment since the 1960s.
The May jobs report comes as the Federal Reserve prepares to vote on interest rates next week. The central bank has maintained rates at a range of 5.25 percent to 5.5 percent since July 2023, and hopes are low that it will start cutting rates this month.
The Fed raised interest rates to their current two-decade high in an effort to tamp down on 40-year high inflation. After peaking at 9.1 percent in June 2022, inflation has eased significantly, falling to 3.4 percent in April.
However, as inflation remains stubbornly above target, the central bank has repeatedly held rates steady.
“After a lower-than-expected April jobs report, the labor market bounced back, revealing its ongoing strength,” Joe Gaffoglio, president of Mutual of America Capital Management, said in a statement.
“Given this continued growth, we don’t expect the Federal Reserve to cut rates anytime soon, especially as inflation remains sticky above the Fed’s 2% target level,” Gaffoglio added.
Traders currently expect the Fed’s first rate to come in September, according to the CME FedWatch tool.
President Biden touted Friday’s strong job numbers — and the 15.6 million jobs added since taking office — while also vowing to continue efforts to bring down prices.
“The great American comeback continues, but we still have to make more progress,” the president said in a statement, adding, “I will keep fighting to lower costs for families like the ones I grew up with in Scranton.”
As interest rates remain high and Americans continue reeling from the lingering effects of inflation, Biden is struggling to turn around Americans’ opinions on the economy ahead of November’s rematch against former President Trump.
A recent ABC News/Ipsos poll found that more Americans trust Trump on the economy and inflation than Biden.
While 46 percent said they trust the former president on the economy, just 32 percent said the same of the sitting president. On inflation, 44 percent said they trust Trump, compared to the 30 percent who trusted Biden.
This could spell trouble for Biden, who The Hill-Decision Desk HQ polling average shows narrowly trailing Trump by 0.8 percent.
