Last updated on July 18th, 2023 at 01:52 pm
The US economy added 390,000 new jobs last month, as the unemployment rate remained at 3.6%. People continue to spend, and the economy is rolling along.
US employers added a healthy 390,000 jobs in May, extending a streak of solid hiring that has bolstered an economy under pressure from high inflation and interest rates.
Last month’s gain reflects a still-healthy job market despite concerns that the economy will weaken in the coming months as the Federal Reserve steadily raises rates to fight inflation. The unemployment rate was unchanged at a low 3.6%, the Labor Department said Friday.
Dean Baker tweeted about the debate over whether inflation is due to underlying causes or supply chain shocks:
4.3 percent wage-growth is only moderating higher than the peak 3.6 percent YOY rate hit in February 2019. This means that if we are concerned about underlying inflation, rather than supply shocks, most of the Fed's work has been done.
— Dean Baker (@DeanBaker13) June 3, 2022
The deceleration of wage growth suggests that the inflation problem is more related to supply issues than the Republican claim that Biden caused inflation through spending. The supply chain issues are related to COVID, which remains a crisis in China, along with the Russian invasion of Ukraine.
Democrats should continue to treat inflation as their top priority, but once the supply chain issues resolve, inflation could come down, and the US economy launch into a strong growth period.
Republicans didn’t get the bad economic news they were hoping for in the new jobs report, so they have returned to endlessly whining about baby formula.
Awards and Professional Memberships
Member of the Society of Professional Journalists and The American Political Science Association
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