The US economy exceeded expectations and added 272,000 jobs in May, giving President Joe Biden an unexpected boost ahead of his first debate against former president Donald Trump later this month.
The unemployment rate changed little at 4 percent, according to the Bureau of Labor Statistics. But the number exceeded what economists expected. The ADP Employment report projected 152,000 jobs added in May.
The number gives Biden a welcome uplift when many Americans feel the economist is sluggish.
“The great American comeback continues, but we still have to make more progress,” the president said, in response to the news. “On my watch, 15.6 million more Americans have the dignity and respect that comes with a job. Unemployment has been at or below 4 per cent for 30 months—the longest stretch in 50 years. And a record high share of working-age women have jobs.”
Health care saw the largest increase, adding 68,000 jobs in May while government added 43,000 jobs.
In addition, wages grew by 0.4 percent in the past month and have grown by 4.1 percent in the past 12 months. That number exceeds the inflation rate. Last month, BLS reported that the consumer price index increased by 0.3 per cent in April and by 3.4 percent in the past 12 months.
The increase in wages means workers’ earnings now outpace the increase in prices for cost of living.
But the unemployment rate ticked up to 4 percent, thereby ending the longest streak of unemployment being below 4 percent since the late 1960s.
The hot labor market gives Biden another chit as he prepares to debate Trump in Atlanta on June 27. Polling has consistently shown that voters trust the former president with the economy more than the incumbent, despite the historic job losses that occurred during the early days of the Covid-19 pandemic.
Employment has been consistently low throughout Biden’s presidency. The Federal Reserve has said that it would take the labor market into account as it weighs whether to cut interest rates after raising them to curb inflation throughout 2022.
“We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent,” Powell said last month. “So far this year, the data have not given us that greater confidence.”
In his statement about the jobs report, Biden mentioned his administration’s commitment to lowering inflation.
“I’m fighting to make rent more affordable by building 2 million new homes,” he said.
He added that he is also “fighting to lower the cost of health care and prescription drugs, like insulin and inhalers.”