PHOENIX — The latest monthly jobs report from the Bureau of Labor Statistics estimates that the US added 390,000 jobs in May. Unemployment was reported at 3.6%, only a tenth of a point off the pre-pandemic low in February 2020. When considering the pre-pandemic high in employment, the US job market is now 99% recovered.
Arizona is in a better position employment-wise than the US in general. April job numbers showed the state added over sixteen thousand jobs. Pre-pandemic employment levels were surpassed in December, 2021 and the state now has almost fifty thousand more jobs than it had at its pre-pandemic high.
COVID-19 was a massive shock to the U.S. job market, with over 20 million jobs being lost in April 2020 alone. The market has been in recovery since then. Since early 2021 the monthly job report numbers have swung between 260,000 and 710,000. A monthly report of under 400,000 breaks an established pattern of lower than higher monthly numbers.
Local economist Jim Rounds said that the appearance of slower monthly job numbers is not necessarily a concern. “It’s solid enough that it’s going to enable the Fed, or at least they will feel comfortable with their current path of raising interest rates,” Rounds said. “And also siphoning some money out of the economy to slow things down and try to tackle inflation.”
Inflation needs to be tackled. Monthly wage growth numbers, released concurrently with the jobs report, have historically remained higher than inflation in the past 10 years. This all changed in February 2021 when inflation began outpacing wage growth. It has only gotten worse, with wage growth stalling in the 4% range and inflation above 7%. This means that even if wages are growing, in real terms, people are still taking home less than they did before.