What Is Happening in the Labor Market?

Two Employment Surveys Diverge

By Christine Cooper and Rafael De Anda
CoStar Analytics

June 7, 2023 | 8:54 A.M.

Most market watchers last week were surprised to see that employers continued to hire at a robust pace in May.

The Bureau of Labor Statistics reported that nonfarm employment grew by 339,000 positions in the month. Furthermore, nonfarm job growth in April and March was revised higher by a total of 93,000 positions.

The new data brings the three-month moving average of job gains to 283,000, almost three times the number that the Federal Reserve thinks is enough to account for population growth and keep the labor market in balance — and to keep inflation restrained.

Moreover, average hourly earnings showed a 4.3% gain over the year, faster than the 3.5% gain that the Fed is seeking. Other recent positive labor markets signs include a labor participation rate for workers under the age of 55 years that has returned to its pre-pandemic rate, an unexpected uptick in job openings, signaling continued demand for workers and a persistently low level of claims for unemployment benefits.