Economy adds more jobs than expected in May

Employment surged in May, rising higher than expectations, while unemployment remained unchanged, according to the latest monthly jobs report from the Bureau of Labor Statistics (BLS). 

Job gains increased by 390,000 in May as the unemployment rate remained at 3.6%, according to the Employment Situation Summary. This was driven by increases in the leisure and hospitality sector, professional and business services and in transportation and warehousing. However, employment in retail decreased.

"The May jobs report was a strong one in all the right ways," Curt Long, National Association of Federally Insured Credit Unions (NAFCU) chief economist and vice president of research, said. "Job growth exceeded expectations and labor force participation continued to improve. Wage gains were decent but more modest than a year ago, bringing the year-over-year gain down to its lowest level since December."

Despite these gains, hiring was down from April and there are still many more job openings to fill, one expert noted. But he said it remains one of the strongest labor markets in the past 50 years.

"Job growth slowed slightly in May and the unemployment rate was unchanged," Mike Fratantoni, Mortgage Bankers Association senior vice president and chief economist, said. "There are still millions more job openings than people available to fill them, and wage growth remains strong, with average hourly earnings up 5.2% compared to last year. By almost any measure, this is one of the strongest job markets in the past 50 years."

Experts believe that these strong job market gains will likely encourage the Federal Reserve to continue on its current path for more interest rate hikes this year. If you want to take advantage of the current interest rates, you could consider refinancing your private student loans. Visit Credible to find your personalized interest rate without affecting your credit score.

INFLATION, SUPPLY CHAIN ISSUES AFFECTING AMERICANS' SPENDING HABITS: WHAT TO DO TO HELP

Fed likely to continue raising interest rates

The Federal Reserve raised interest rates by 50 basis points last month, the highest rate hike in about 20 years. And before that, the Federal Open Market Committee (FOMC) raised interest rates by 25 points at its March meeting. But experts said the Fed is still likely to raise rates several more times this year and into 2023 as it combats decades-high inflation. 

"Today’s report will likely support additional 50-basis-point hikes by the Federal Reserve at the next two FOMC meetings," Fratantoni said. "Even if inflation readings show some deceleration, this degree of labor market tightness will likely continue to put upward pressure on wages and prices."

And other experts agreed. 

"Overall, this report should stem recessionary concerns and provides the Fed with more leeway to achieve a soft landing for the economy," Long said. "Credit unions maintain a cautious, yet optimistic attitude to keep their members equipped with the tools to meet economic challenges."

As the Fed continues to raise rates, one way that consumers can take advantage of rates now is by refinancing their mortgages. You can visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.

INFLATION EASES FOR FIRST TIME IN MONTHS, BUT REMAINS NEAR 40-YEAR HIGH

Experts hopeful that inflation could slow in coming months

Inflation eased in April, rising 8.3% annually and remaining near its previous 40-year-high of 8.5% set the month prior, according to the latest Consumer Price Index released by the Bureau of Labor Statistics (BLS).

But now, some experts are hopeful that inflation pressures could ease more in the coming months as the wage-inflation spiral slows. 

"The rate of hourly wage increase slowed down to an annualized rate of 3.6% in the previous two months," said Dawit Kebede, Credit Union National Association (CUNA) senior economist. "This lowers the inflationary pressure that could possibly come from a continued wage increase in a low labor supply environment and it reduces the probability of a wage-inflation spiral."

If you are struggling financially amid rising inflation, paying down debt with a personal loan can help you lessen your monthly payments. To see if this is the right option for you, contact Credible to speak to a loan expert and get all your questions answered.

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