The U.S. economy added 223,000 jobs in May as U.S. companies continued their hiring spree, according to the Labor Department's monthly jobs report released Friday. The unemployment rate fell to 3.8 percent, the lowest since 2000.
In a highly unusual move, President Trump tweeted early Friday morning that he was "looking forward to seeing the employment numbers." Trump's tweet moved markets as many on Wall Street thought the president was signaling that job gains would be far higher than the 200,000 that had been expected. Stocked jumped at the open and stayed up throughout trading with the Dow gaining over 200 points on Friday.
Many economists predict the unemployment rate will fall even further this year, potentially dropping to 3.5 percent, which would be the lowest rate since 1969. Wage growth ticked up slightly to 2.7 percent over the past year, but is still sluggish.
"The labor market is continuing its longest streak of job growth on record," said Martha Gimbel, researcher director at Indeed.com, an employment website. "This recovery is showing no sign of slowing down."
Presidents have typically received an advance look at the jobs report, but they refrain from commenting until after it releases because they don't want to be seen as influencing the markets. A long-standing federal rule forbids government employees from commenting on the jobs numbers until an hour after the release, but Trump has ignored that rule before.
Hiring was strong across the board with retail and health care leading the surge in May. Blue-collar jobs have also picked up in the past year as rising oil prices and the global economic rebound are driving more demand for construction and manufacturing workers.
The United States has gained 95,000 manufacturing jobs and 110,000 construction jobs from the start of the year through May. Hiring in manufacturing is off to the best start this year since 2011.
There was celebrating in Granite City, Ill., in May as about 500 jobs came back when the U.S. Steel plant there, known as Granite City Works, reopened. The company says it brought the workers back because Trump's steel tariffs helped bump up demand for domestic steel.
"We’re finally seeing steady growth in blue collar work, but the problem is it’s not accompanied by strong wage growth," said Heidi Shierholz, director of policy at the Economic Policy Institute and a former chief economist at the Labor Department.
While some steel and aluminum jobs have returned after the tariffs went into effect, there are concerns that jobs may be lost in industries like autos that have to pay higher prices for the metals.
Executives at many companies complain they can't find enough workers. But the pickup in hiring this year suggests they are still adding to their head count and more people are reentering the job market after taking time off for health reasons, taking care of family or just because they didn't think there were enough opportunities for them.
Job gains have averaged 207,000 a month this year, a faster pace than last year or the year before.
While American companies remain on a hiring spree, they continue to be reluctant to raise wages. The annual pace of wage growth in May was just 2.7 percent, which is barely above inflation.
Economists have been predicting that wages would start to shoot up as companies found it harder to find workers to fill openings and tried to keep star employees from leaving for other firms. While there have been occasional reports of wage increases such as a Chick-fil-A restaurant in Sacramento hiking pay from $13 to $18 an hour, the national data are still not showing much of a widespread increase in pay.
“Small and medium-sized businesses don't have the capacity to raise wages that fast,” said Gregory Daco, chief U.S. economist at Oxford Economics.
This economic expansion is now the second longest in modern American history, behind only the 1990s tech boom that saw widespread job and wage gains for people across the income and skills spectrum. There are encouraging signs that more Americans are benefitting from today's hot jobs market.
Unemployment for African Americans has fallen to the lowest level on record, dropping below 6 percent for the first time ever, an encouraging sign that Trump played up in a speech Friday at a Coast Guard ceremony. The Hispanic rate is also close to its lowest level since the Labor Department began tracking the unemployment rates for minority groups in the early 1970s.
While African-American unemployment is still above that of whites, the gap has narrowed to the lowest ever. The unemployment rate for Americans who graduated high school but didn't attend college has also fallen sharply in recent months from 4.5 percent in January to 3.9 percent in May.
The strong jobs report is expected to keep the Federal Reserve on track to hike interest rates at their next meeting in mid-June.