The US Department of Labor said on Friday that the nonfarm sector added 223,000 jobs in May, up from 159,000 in April, helping push the country's unemployment rate to an 18-year low of 3.8%, matching April 2000. Amid reports of worker shortages across the country and in many industries and skill levels, the latest data confirmed that wages are rising. The average hourly wage for US employees increased by $0.08 to $26.92 from the previous month, a year-over-year increase of 2.7%. The labor force participation rate, which measures the total number of employed and job-seeking individuals as a share of the working-age population, edged down 0.1 percentage point to 62.7% from the previous month.
The "trade war" has been unfolding dramatically. On May 19, China and the US reached a consensus to "not fight a trade war," but on May 29, the White House backtracked and officially announced stricter restrictions on Chinese investment in US technology sectors and a 25% tariff on $50 billion worth of Chinese exports to the US. The back-and-forth policy changes have caused ongoing tensions in the US-China trade war.
Furthermore, the policy limiting the visa validity period for certain Chinese citizens in the US is set to take effect on June 11, causing anxiety among current and prospective international students. Although US authorities later clarified that it will not affect student visa validity, the specific details remain to be seen on the 11th.
To mitigate the impact of a global trade war on the US economy, American companies have made it clear they see no reason to stop hiring.
If trade tensions worsen, they could spur industry to intensify hiring to revitalize the economy. For example, manufacturers added 259,000 jobs last year, a 2.1% increase. This was the largest gain in factory jobs since 1995.
The unemployment rate for Black or African Americans fell sharply this month, dropping from 6.6% to 5.9%, the lowest level since the government began keeping records in 1972.
President Trump has touted this figure as a major accomplishment of his economic policies.
Shortly after the data release, Trump said at an event, "We've reached another historic milestone. The unemployment rate was just announced at 3.8%, and we also hit a record low for African-American unemployment. We are very honored. And by the way, the unemployment rate for women is the lowest in 19 years."
However, the current labor force participation rate—defined as those working or actively looking for work—continues to decline, which is the main driver behind the falling unemployment rate.
More interestingly, the number of Americans not in the labor force increased by 170,000 to 95.915 million in May, a record high. Considering the current 6.1 million unemployed, this means there are now 102 million people not employed in the US.
Clearly, judging the US economic trajectory solely by the unemployment rate is incomplete. In other words, contrary to Trump's optimistic portrayal, there is considerable economic slack. To fill job openings, employers may be hiring drug users and ex-convicts.
Unemployment Rates by College Major
Top 10 Majors with the Highest Unemployment Rates
Mass Media (7.4%)
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English Language (6.4%)
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Fine Arts (6.4%)
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Liberal Arts (6.3%)
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Philosophy (6.2%)
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Earth Sciences (5.8%)
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Anthropology (5.7%)
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General Social Sciences (5.6%)
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Mathematics (5.6%)
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Engineering Technologies (5.5%)
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History (5.5%)
Top 10 Majors with the Lowest Unemployment Rates
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Medical Technicians (0.9%)
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Special Education (1.3%)
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Industrial Engineering (1.7%)
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Elementary Education (2%)
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General Education (2.2%)
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Early Childhood Education (2.3%)
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Civil Engineering (2.3%)
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Nursing (2.3%)
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General Engineering (2.4%)
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Miscellaneous Education (2.5%)
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Agriculture (2.5%)
From the data, we can see that Journalism has the highest unemployment rate among majors at 7.4%, while Medical Technology graduates have the lowest at 0.9%. Majors favored by domestic international students, such as Computer Science (4.4%) and Electrical Engineering (4%), are only around average. One possible reason is that these majors have become too popular in recent years, leading to an increase in graduates and a relative decline in employment rates.
Among the 10 majors with the lowest unemployment rates, education-related fields account for five.
