Economy adds 223K jobs in May, unemployment down to 3.8 percent

The U.S. economy added a robust 223,000 jobs in May, which was better than expected, as the labor market maintained steady growth.

The unemployment rate fell to 3.8 percent, the lowest level since April 2000, and a slight drop from 3.9 percent, the Labor Department reported on Friday.

Job gains were 15,000 more than previously reported in March and April.

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During the last three months, jobs added averaged 179,000. Expectations were for a May gain of about 200,000.

The economy, which Trump administration officials say is headed toward a 3 percent pace of growth, grew at a 2.2 percent rate in the January to March quarter, slower than initially reported, the Commerce Department reported on Wednesday.

While the figures were good, President Trump notably tweeted about the jobs report ahead of its release, breaking protocol by sending a signal to markets that the number was solid.

At 7:21 a.m., more than an hour before the 8:30 a.m. release of the jobs numbers, Trump tweeted, “Looking forward to seeing the employment numbers at 8:30 this morning.”

Looking forward to seeing the employment numbers at 8:30 this morning.

— Donald J. Trump (@realDonaldTrump) June 1, 2018

The president gets the jobs numbers ahead of time and is required by a federal rule to refrain from comment for at least an hour after their release to avoid leaking confidential information that can influence stock markets.

Trump has previously violated this rule that bars all executive branch employees, including the president, from making public comments on leading economic indicators before the hour deadline is reached.

But Friday was the first time he appeared to reference the numbers prior to their release.

Trump had repeatedly called the job numbers “fake” during the economic recovery under President Obama but has touted the numbers as a significant achievement throughout his time in the White House.

Average hourly pay increased 2.7 percent over the past year, up slightly from last month but still slower than what is typical with such a low unemployment rate.

Robert Frick, corporate economist with Navy Federal Credit Union, said the latest jobs report was strong across the board with one exception: wage growth.

“While wage increases ticked up to an annualized 2.7 percent, real wages have lost ground as inflation has been increasing at a more rapid pace,” Frick said.

“One good piece of news in the wage picture is that raises are beginning to filter down more to lower-wage earners,” he said.

PNC chief economist Gus Faucher said that jobs gains were broad-based reflecting growth across most sectors of the economy.

With the excellent jobs report, including the solid gain in wages, the Federal Reserve board will raise a key interest rate when it meets on June 13.

The Fed “wants to take some of the pressure off of the labor market to avoid overheating in the economy that would push inflation too far above the Fed’s 2 percent inflation goal,” Faucher said.

More people are seeing improving job conditions. The unemployment rate for high school graduates fell to 3.9 percent, a 17-year low. For black Americans, the jobless rate hit a record low of 5.9 percent.

The gap between the rate of unemployment for white workers at 3.5 percent and the 5.9 percent for black Americans is the smallest gap since the data has been tracked in the early 1970s, according to Labor Department data.

In May, retailers added 31,000 jobs and health care employment rose 29,000.

Construction employers added 25,000 jobs last month and 286,000 during the past 12 months.

Manufacturing also continued steady growth, adding 18,000 jobs in May and 259,000 over the past year.

Mining added 6,000 jobs in May. Since a low point in October 2016, employment in mining has grown by 91,000 jobs.

But there is growing concern that President Trump’s tariffs on steel and aluminum imports from the nation’s closest allies, including Canada and Mexico, could put the brakes on jobs growth and eventually cost the United States millions of jobs.

The president has also threatened China with tariffs on $50 billion in goods and he has instructed the Commerce Department to investigate whether auto imports threaten national security.

House Minority Leader Nancy Pelosi (D-Calif.) blasted the May report, saying that the strong employment numbers “mean little to the families hit with soaring new costs under the Republicans’ watch.”

“From day one, the White House and Republicans in Congress have sold out working and middle-class families to further enrich the wealthy and big corporations shipping jobs overseas,” Pelosi said.