Job Market Update: May 2018

What's the latest with the unemployment rate? We've got the details and the takeaways.

Articles

Unemployment Rate

  • Unemployment Rate

    3.8%

  • Change from Last Month

    -0.1%

5 Things to know about May’s job report

The unemployment rate fell to 3.8 percent in May of 2018 taking the new record for the lowest unemployment rate since pre-recession days and the dot-com boom (18 years.) There were an estimated 223,000 jobs added to the economy, surpassing economist’s predictions of 190,000 additions.

The unemployment rate held steady at 4.1% for 7 months, until last month, when it dropped to 3.9%. May also marks the 92nd consecutive month of job gains, which is, again, a record-breaking number.

The real headline of May’s Jobs Report? Wages. Payrolls rose by 8-cents in May, bringing the new average hourly earnings for all employees to $26.92. Over the past 12 months, earnings have increased by 71-cents, or 2.7%, though the path to get there has been slow. Our Senior Vice President, Amy Glaser, spoke to CNBC about the lagging pay growth.

“It really defies the law of supply and demand. Employers are seeing an increase in turnover, and they’re really weighing whether they need to increase wages.”

Perhaps this month marks the start of change. Here are 5 other things you need to know about May’s job report:

1. Milestone May

According to CNN, May’s 3.8% unemployment rate matches its lowest point in half a century, tying the lowest level since 1969 — a milestone in the recovery from 10% unemployment in 2009.

2. Wages, wages, wages

While May’s 8-cent increase is significant, it’s been a long road to get here. The New York Times cites everything from slow productivity growth to the decline of digital disruption as potential reasons why. So why are they rising now? As our Senior Vice President said, in order for organizations to attract the talent they need, they have likely begun increasing pay rates in order to hire the workers they need.

3. Rising rates

Wage growth isn’t good news for everyone, though. Wall Street has their eyes on the Federal Reserve, who is likely going to raise interest rates at least once more in 2018 – not to mention the foreign trade tensions they’re currently dealing with.

4. Manufacturing and machinery

Speaking of trade tensions, they don’t seem to be affecting the manufacturing industry – yet. Manufacturing added 18,000 jobs in May and has risen by 259,000 over the past years. Machinery accounted for 6,000 of May’s manufacturing jobs.

5. Where are the workers

With unemployment this low – and even lower than the national average in 30% of the country – organizations are scrambling to find the workers they need. From apprenticeships to increased wages and benefits, to the aging workforce, employers are starting to think out-of-the-box in their recruitment efforts. 

Jobs Added

223,000

  • Manufacturing

    18,000

  • Construction

    25,000

  • Retail Trade

    31,000

  • Professional & Business Services

    23,000

  • Transportation & Warehousing

    19,000

  • Leisure and Hospitality

    21,000

  • Education & Health Services

    39,000

  • Mining

    6,000

Job Growth by Industry

May 2018

In Your Region

April 2018

The Bureau of Labor Statistics breaks down the unemployment rate geographically, one month behind its national breakdown, so this month we’re reviewing April’s regional performance.

The Midwest continued to have the lowest unemployment rate at 3.4 percent, while the South and West tied for the highest at 4.2 percent.

West

West

  • Unemployment Rate

    4.2%

  • Change from Last Month

    0%

Lowest and highest unemployment rates

Hawaii (2%) / Alaska (7.3%)

Midwest

Midwest

  • Unemployment Rate

    3.4%

  • Change from Last Month

    -.1%

Lowest and highest unemployment rates

North Dakota (2.6%) / Michigan (4.7%)

Northeast

Northeast

  • Unemployment Rate

    3.9%

  • Change from Last Month

    0%

Lowest and highest unemployment rates

New Hampshire (2.6%) / Pennsylvania (4.7%)

West

South

  • Unemployment Rate

    4.2%

  • Change from Last Month

    0%

Lowest and highest unemployment rates

Tennessee (3.4%) / District of Columbia (5.6%)

Why This is So Important

From the tightening labor market to the lower than expected growth in wages, companies are rethinking their hiring and retention strategies through. Here are 3 ways you can do the same:

  1. Apprenticeships: We are seeing a resurgence of work-based learning opportunities such as apprenticeships and high school cooperatives as a response to low unemployment. College attendance rates are on the decline, with students reporting they are not planning on attending college either due to financial or academic reasons. Apprenticeships are a no-degree solution.
  2. Accelerated Hiring Processes: According to our recent survey, 60% of job seekers received at least two job offers the last time they were searching for work. If organizations can’t offer workers what they want fast enough, they will go to the competition. From cutting back on job requirements to shortening interviews, organizations are finding ways to speed up the job offer process.
  3. Reigning in Retention: On top of trying to attract more workers, organizations are also trying to desperately hold on to the employees they already have. While increased pay is one way to do so, employers are also paying attention to other job factors, such as work-life balance, customized career paths, and innovative workspaces, to retain their talent.

Sign up for Emails

Related Articles

The power of corporate giving

Find out how corporate donations help you give back and give you a competitive advantage.

read more
Employer-Employee Alignment (and Misalignment)

Do companies deliver what people are really looking for in their jobs? Here’s where employers and employees are on the same page—and where they’re not.

read more