The government announced that 272,000 jobs were created in the United States in May

Hiring in several economic sectors last month (Photo: The Canadian Press)

About 272,000 jobs were created in the U.S. in May, a sign that businesses have enough confidence in the economy to continue hiring despite an acceleration from April and continued high interest rates, the government indicated in a report released Friday.

The figure suggests that the economy continues to grow, driven by consumer spending on travel, entertainment and other services. US airports also reported record traffic over the Memorial Day weekend.

The May jobs report will help ease fears about the US economy.

But it showed few signs of a potential slowdown. For example, the unemployment rate rose slightly for the second month in a row, from 3.9% to 4%, ending a 27-month streak with an unemployment rate below 4%, the longest such streak since the late 1960s.

US President Joe Biden is expected to see the report as a sign of a healthy economy under his administration. Republican candidate Donald Trump, Mr. Biden's economic policies have focused his criticism on rising inflation, which polls show weighs heavily on voters' assessment of the economy.

Hourly wages rose 4.1% from a year ago, outpacing the rate of inflation, which stood at 2.7% and faster than in April.

The key ratio

The US Federal Reserve (Fed) wants the economy to cool down before it cuts its key rate. It raised its rate sharply in 2022 and 2023 after a strong recovery from the pandemic recession fueled the worst inflation in 40 years.

Jerome Powell, chairman of the agency, said he expects inflation to continue to decline. He stressed that central bank policymakers need “higher confidence” that inflation will fall toward its 2% target before cutting borrowing costs.

“This report will make the Fed's job harder,” said Julia Pollock, chief economist at ZipRecruiter. “No one is getting clear signals that they believe a (major) rate cut is appropriate in July or September.”

Hiring last month spanned many economic sectors. In particular, health care, which created 84,000 jobs, and restaurants, hotels, and entertainment saw 42,000 new jobs.

The economy grew at an annualized rate of just 1.3% in the first three months of 2024, a sharp decline from the 3.4% pace recorded in the last quarter of 2023, the government announced last week as business supply and other volatile factors, consumer and business spending clearly demonstrated that demand was strong.

Only 1.5 million people lost their jobs in April. This is the lowest monthly figure recorded – barring an epidemic – since data began to be recorded 24 years ago.

Christopher Rugaber, The Associated Press