Nonfarm Payrolls today: US employment up by over 270,000, but labor costs rise

Today, the United States’ Bureau of Labor Statistics (BLS) announced the nation’s Nonfarm Payroll figures for May 2024.

NFP numbers for May

Last month brought with it broadly good news for the US economy. In May, Total nonfarm payroll employment increased by 272,000.

This was higher than the average monthly gain of 232,000 over the previous 12 months, according to BLS.

Market expectations

Prior to the announcement of the figures, analysts had broadly expected numbers around 185,000 for the month of May, up 10,000 from April’s reading of 175,000.

This means that May’s reading of 272,000 exceeded market expectations by almost 100,000 jobs.

US unemployment rates

Also announced at the same time were the United States’ monthly unemployment rate for May. US unemployment rate changed little at 4%, the Bureau reported today. Employment continued to trend up in several industries, led by health care; government; leisure and hospitality; and professional, scientific, and technical services.

Last month, an unemployment rate of 3.9% was announced for April 2024, meaning that the latest figures show a very marginal improvement of 0.1%.

US labor costs and productivity increases

Yesterday, on June 6^th, the BLS also announced revised productivity and costs figures for Q1 of 2024, stating that:

Labor expenses up by 4%

However, labor is also getting significantly more expensive for the United States.

The same data showed that labor costs in the nonfarm business sector increased 4% in the first quarter of this year, reflecting a 4.2% increase in hourly compensation, but only a 0.2% rise in productivity.

This means that, effectively, labor costs have risen by 0.9% over the last four quarters for the nation.

In terms of private nonfarm payrolls, average hourly earnings for all employees increased by 14 cents, or 0.4%, to $34.91 in May.

Over the past 12 months, average hourly earnings have increased by 4.1%. In May, average hourly earnings of private-sector production and nonsupervisory employees increased by 14 cents, or 0.5%, to $29.99.