Main points from the standout May employment report

On June 7, 2024, the latest job report was released, bringing mixed news to Americans and the Federal Reserve regarding the state of the economy. While economists such as Dean Baker acknowledged the positives in job gains, other aspects of the report revealed concerning trends such as slower GDP growth, reduced spending, and an increase in credit card delinquencies.

In May, Diane Swonk from KPMG highlighted some of the concerning points in the job report. Despite a surge in payrolls, there was also an uptick in the unemployment rate from 3.9% to 4%, marking the first time in over two years that it exceeded 4%. Additionally, wage gains hit 4.1% over the past year, a reversal of the previous trend of cooling down.

The rise in wages was particularly notable in industries like personal care services and home maintenance. Swonk emphasized that while these wage gains do not directly target wages, they pose a challenge for policymakers who need to address high inflation rates and offsetting increases in goods prices to ensure economic stability.

Overall, while job gains were positive according to Swonk’s analysis, she cautioned that rising unemployment and wage gains could signify potential challenges ahead for the economy. Policymakers will need to carefully monitor these evolving trends to ensure economic stability and address any underlying issues that may arise.

By Sophia Gonzalez

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