WASHINGTON — The nation’s employers stepped up their hiring in May, adding a robust 339,000 jobs, well above expectations and evidence of strength in an economy that the Federal Reserve is desperately trying to cool.
Having imposed 10 straight rate hikes since March 2022, the Federal Reserve is widely expected to skip a rate increase when it meets later this month, though it may resume its hikes after that. Chair Jerome Powell and other Fed officials have made clear that they regard strong hiring as likely to keep inflation persistently high because employers tend to sharply raise pay in a tight job market.
Some cracks in the economy’s foundations, though, have begun to emerge. Home sales have tumbled. A measure of factory activity indicated that it has contracted for seven straight months.And consumers are showing signs of straining to keep up with higher prices. The proportion of Americans who are struggling to stay current on their credit card and auto loan debt rose in the first three months of this year, according to the Federal Reserve Bank of New York.
The U.S. economy as a whole has been gradually weakening. It grew at a lackluster 1.3% annual rate from January through March, after 2.6% annual growth from October through December and 3.2% from July through September.
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