Labor Market and Economy Report: A Look at Trends in May 2024

Executive Summary

Job Growth

The U.S. economy added 272,000 jobs in May, which is still higher than the average monthly gain of 232,000 over the prior 12 months.

The healthcare industry continued to see an upward climb since June 2022, adding 68,300 more jobs last month. Government also saw an increase in May, adding 43,000, making it the second highest increase among sectors after healthcare. Over the last twelve months, government gained a total of 617,000 jobs, only slightly below the healthcare sector’s increase of 781,900.

Professional, scientific and technical services added 32,000 jobs in May, with professional and business services accounting for 22,900 new jobs. Other industries Aston Carter supports saw growth as follows: finance activities (+9,600), administrative and support services (9,00+), manufacturing (+8,000), aerospace and defense (+1,100), automotive (+3,100), and utilities (+1,300).

As a whole, job openings declined to 8.1 million in April (the most recent data), reaching its lowest level since February 2021 but still above the pre-pandemic norm.

Unemployment and Labor Force Participation

The unemployment rate increased from 3.9% in April to 4% in May (the first time it has hit 4% since January 2022). The labor force participation rate also dropped from 62.7% to 62.5%. Unemployment rates, specific to the industries Aston Carter supports, were as follows for May: finance and insurance (2.4%), professional and business services (4%), manufacturing (2.8%), and hospitals (1.7%). 

Among skilled labor categories Aston Carter sources talent for, unemployment in business and financial was 2.5% and office and administrative was 3.3%.

Inflation

The year-over-year inflation rate was 3.3% in May. This is the second month in a row that inflation has seen a decrease, though small.

Wage Growth

Average hourly earnings increased 4.1% between May 2023 and May 2024. From May 2023 to May 2024, “real" average hourly earnings (wages adjusted for inflation) increased 0.8%, a slight increase from April’s 0.5% increase. Despite average hourly earnings pacing with inflation, many consumers are still feeling the pressure of higher prices.