U.S. economy adds 272,000 jobs in May, but unemployment rate rises to 4%

DALLAS – The monthly economic check-up looks good.

The latest reports show companies hiring more people in May than anticipated, despite continuing inflation and high interest rates.

While the economy is still growing, there are ongoing concerns. 

While some factors that move our economy are up, others are not so much.

The economy added 272,000 jobs last month, which was better than expected.

On the other hand, unemployment went up just a bit to 4%.

“They certainly don’t tell me that we’re over the hump, that this is a strong economy,” said SMU economics professor Mike Davis. “If you saw the basketball game last night at the end of the first quarter, it was a clear win for Boston. This is not a clear win for the U.S. economy.

Tre’ Black is CEO of On Target Supplies and Logistics, a Dallas-based management firm operating in the semi-conductor, telecom and utility sectors nationwide.

“The jobs report is encouraging. Whenever you can see more jobs created in the economy, that’s a good thing. However, it’s complicated,” he said. “You still have a situation where unemployment has ticked up a bit. We do believe that there are probably gig workers that are coming back into the workforce.”

Black says business is still bothered by interest rates, which has increased business costs.

“That’s going to be a huge issue for companies of all sizes,” he said. “There’s so much innovation, investment in technology such as AI that need to be addressed. And so that’s one of the main concerns as it relates to the slowdown of this economy, despite the spike in hires.”

The National Federation of Independent Business reports about 42% of business owners say they have job openings that they cannot fill.

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NFIB Texas President Jeff Burdett says small businesses continue to try to attract and retain employees.

“We’re seeing a tight labor market as our owners still try to fill current positions at their firms,” he said. “37% of owners in our report reported raising compensation just in May. and that’s really historically very high.”

What has hurt the economy most has and might continue to be inflation.

“I’m going to be especially interested in the inflation numbers when we get those. There’s a little bit to be optimistic about there, but again it’s kind of a mixed picture,” Davis said. “Inflation isn’t ramping back up, but it’s not going down as fast as we would like it to.”

The new inflation numbers will be released on Wednesday. The Consumer Price Index will tell us where inflation is and its impact or your buying power.