The jobs report disappointed expectations of economists hoping to see higher numbers. (iStock)
The U.S. Bureau of Labor Statistics released its latest jobs report Friday showing the U.S. economy gained 559,000 jobs in May. And while President Joe Biden voiced his optimism over the report, economists are less enthusiastic.
"This morning’s jobs report from the Bureau of Labor Statistics showed a modest rebound in hiring in May from April’s disappointing report, with 559,000 nonfarm payroll jobs added," Fannie Mae Chief Economist Doug Duncan said. "However, this number was below consensus expectations, and is still somewhat anemic if forecast growth expectations are to be realized."
The report showed the unemployment rate declined by 0.3 percentage points to 5.8% in May. Earlier this week, a report generated using ADP’s employment data showed the market could expect to add close to 1 million jobs in May - significantly higher than the 559,000 added.
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Despite this disappointment, Biden said there is a reason for optimism. In a press briefing following the release of the jobs report, Biden said the U.S. is the only major economy where economic projections today are stronger than they were in 2020.
"No other major economy in the world is going as fast as ours," he said. "No other economy is gaining jobs as quickly as ours."
He credited this growth with bold action from the recently passed American Rescue Plan, citing that 52% of Americans are fully vaccinated and 75% of U.S. seniors are vaccinated.
As the economy continues to improve, some have blamed unemployment benefits from the federal government for keeping the unemployment rate low. Many states are now either rejecting the additional employment benefits entirely or reinstating more proof of hardships required in order to receive those benefits.
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Biden acknowledged the barriers to adding more jobs but said the federal aid continues to make sense as it is currently structured.
"Access to childcare is one of the biggest barriers in preventing parents from going back to work," Biden said, adding that the upcoming child tax credit payments will help ease this burden. "The temporary boost in unemployment we enacted helped people who lost their jobs through no fault of their own and maybe still haven’t been able to be vaccinated yet. But that’s going to expire in 90 days, and it makes sense that it expires in 90 days."
"I’m extremely optimistic and I hope you are as well," he said.
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One economist said May’s jobs report was lower than anticipated, however, other economic factors could point to an increase in job gains in the weeks ahead.
"The decrease in initial claims for unemployment insurance in recent weeks, the continued robust demand for workers as shown by the high level of job openings, and other data showing increasing economic activity, point to more hiring over the summer," Mike Fratantoni, Mortgage Bankers Association senior vice president and chief economist, said. "MBA is sticking with our forecast of a 4.5% unemployment rate by the end of the year."
The economy continues to improve but the unemployment rate has yet to return to pre-pandemic levels. If you're struggling with your current income or need personal finance help, contact Credible to get all your questions answered by a personal loan expert.
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