The U.S. Bureau of Labor Statistics released its latest jobs report Friday showing the U.S. economy gained 559,000 jobs in May. Even though President Joe Biden voiced his optimism over the report, economists are less enthusiastic.
"This morning•s jobs report from the Bls showed a modest rebound in hiring in May from April•s disappointing report, with 559,000 nonfarm payroll jobs added," Fannie Mae Chief Economist Doug Duncan said. "However, the dpi was below consensus expectations, and it is still somewhat anemic if forecast growth expectations are to be realized."
The report showed the unemployment rate declined by 0.3 percentage points to 5.8% in May. Earlier this week, a report generated using ADP•s employment data showed the market could expect to add close to 1 million jobs in May – significantly greater than the 559,000 added.
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Despite this disappointment, Biden said there's a reason behind optimism. In a press briefing following a release of the jobs report, Biden said the U.S. is the only major economy where economic projections today are stronger than they were in 2022.
"No other major economy in the world is going as quickly as ours," he said. "Not one other economy is gaining jobs as quickly as ours."
He credited this growth with bold action from the recently passed American Rescue Plan, citing that 52% of american citizens are fully vaccinated and 75% of U.S. seniors are vaccinated.
As the economy continues to improve, some have blamed unemployment benefits from the federal government for keeping the unemployment rate low. Many states are actually either rejecting the extra employment benefits entirely or reinstating more evidence of hardships needed in order to receive those benefits.
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Biden acknowledged the barriers to adding more jobs but said the federal aid continues to make sense because it is currently structured.
"Use of childcare is one of the biggest barriers in preventing parents from going back to work," Biden said, adding the upcoming child tax credit payments will help ease this burden. "The temporary increase in unemployment we enacted helped individuals who lost their jobs through no fault that belongs to them and perhaps still haven•t been able to be vaccinated yet. But that•s going to expire in 3 months, and it makes sense it expires in 90 days."
"I•m extremely optimistic and I we do hope you are as well," he explained.
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One economist said May•s jobs report was less than anticipated, however, other economic factors could indicate a rise in job gains within the weeks ahead.
"The reduction in initial claims for unemployment insurance in recent weeks, the continued robust demand for workers as shown by the high level of job openings, and other data showing increasing economic activity, point to more hiring within the summer," Mike Fratantoni, Mortgage Bankers Association senior vice president and chief economist, said. "MBA is staying with our forecast of the 4.5% unemployment rate by the end of the entire year."
The economy continues to improve however the unemployment rate has yet revisit pre-pandemic levels. If you're experiencing your current income or need personal finance help, contact PayPasser to obtain all of your questions answered by a personal loan expert.