The U.S. economy added 223,000 jobs in May, beating expectations and delivering a positive jobs report, indicating a bustling economy. The unemployment rate fell to 3.8%, the lowest it’s been since 2000.
Economists had been expecting an addition of 190,000 and the unemployment rate remaining steady at 3.9%.
Perhaps the most positive news in the report can be found in the wage-growth data. Although the rise in wage growth has been lower than in previous periods of such low unemployment, it still managed to slightly beat expectations. Average hourly earnings rose 0.3% beating forecasts of 0.2%. It’s now up 2.7% over the past year. It was expected to remain steady at 2.6%.
Historically, the rate of wage growth in a period of such low unemployment has been about 4%.
The rise in wage growth also indicates employers are having a hard time filling open positions, leading them to increase wages.
The low unemployment and slight uptick in wages leads many to believe the Fed will raise interest rates in the coming months to head off an overheating economy.
Last month the number of unemployed Americans came into balance with the number of open positions waiting to be filled. There are roughly 6.3 million unemployed Americans according to the Bureau of Labor Statistics and about 6.5 million job openings.
The ratio of jobless Americans to job openings has been cut nearly in half since the beginning of the great recession in 2007. At that time there were 1.9 unemployed Americans for every job opening.
May is the 92nd straight month of positive job growth in the U.S. and the current economic expansion is the second longest in the nation’s history. The U.S. will achieve the largest expansion in its history if it can keep the current pace steady until July of 2019.
Photo via Library of Congress