Companies continue to hire and lift wages at a robust pace. In May, payroll employment rose by 339,000, the most significant monthly increase since January. At the same time, firms continue to lift wages rapidly. Average hourly earnings for non-supervisory workers (which covers 80% of the workforce and is the most extended wage series going back to 1965) rose 0.5% last month and is up 5% in the past twelve months.
The household survey showed a loss of 310,000 in May, but a significant drop in self-employed distorted that result. BLS publishes a household employment figure based on payroll concepts. In May, the household-adjusted employment series posted a gain of 394,000---close to the reported increase in payroll employment.
The May employment comes on the heels of a report that job openings rose 358,000 to 10.1 million in April. The number of job openings to the number of unemployed stands at 1.8, and the long-run average is well below 1.
Since the Fed started to hike official rates in March 2022, the jobless rate is unchanged and near 50-year lows, wage growth remains robust, and there is still far more employer need of workers than supply of workers. Fed policymakers look at the labor market dynamics to ascertain the lagged effects of previous rate hikes and to determine whether pausing their rate-hiking campaign is justified. A fair reading of the data says a pause is not justified.