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(CNN) ––
The US economy added 390,000 jobs in May, revealing a slower pace of hiring, as the historically active job market shows signs of slowing, according to the monthly jobs report from the Bureau of Statistics. Labor (BLS, for its acronym in English), which was published this Friday.
The unemployment rate stood at 3.6%, slightly higher than the half-century low recorded in February 2020, just before the pandemic.
The US will recover all the jobs lost during the pandemic by the end of August, Fitch Ratings projects
Employers were already expected to add hundreds of thousands of jobs last month, even in the face of high inflation, the threat of a possible recession and a new phase in the pandemic-hit economy.
Economists surveyed by Refinitiv forecast a figure of 350,000 new jobs in the United States, with an unemployment rate of 3.5%.
Which would have represented a new low of the pandemic era.
The labor market is almost fully back to its pre-pandemic strength: the United States is only 1.2 million jobs below its pre-lockdown levels.
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Now the focus has shifted from the "Grand Reopening" to monitoring whether the Federal Reserve's attempt to rein in inflation with higher interest rates will not inadvertently throw the economy into recession.
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Recession fears amid rising US jobs
In the first quarter of 2022, the US economy shrank, according to gross domestic product, the broadest indicator that tracks economic activity.
To meet the common definition of a recession, two consecutive quarters of GDP decline are needed, which seems an uncomfortably close possibility for the United States.
However, some economists are quick to point out that one common ingredient of recessions remains unfulfilled: the labor market remains strong.
"From our point of view, the consumer is key, especially in hiring trends. More people with jobs, who have additional income, provide the support for continued spending," said Mike Skordeles, chief US macro strategist at Trust Advisory Services.
Consumer spending is the backbone of America's economic growth.
And while inflation remains skyrocketing, the tight labor market has helped keep people spending for now.
Skordeles said he closely monitors weekly initial jobless claims, as any weaknesses will show up first in that data.
But so far, it hasn't happened.
"If we see a sustained substantial increase in weekly jobless claims, we will change our recession stance," he said.
Initial weekly jobless claims for the week ending May 28 were down 11,000 from the previous week, with 200,000 filing for first-time jobless benefits.
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