By M. Ray Perryman, PhD, CEO and President – The Perryman Group
The United States economy gained 6,469,000 net new jobs over the twelve-month period ending May 2022 for an annual employment growth rate of 4.45%. Over the past year, the arts, entertainment, recreation, accommodation, and food services industries featured both the largest job gains (1,775,200 net new jobs) and the fastest job growth in percentage terms (12.67%) as people resumed travel and tourism. Jobs were up across the board, with all industries reporting job gains from May 2021 to May 2022. The nation’s seasonally adjusted unemployment rate in May was 3.72%, down 1.99 percentage points from what it was a year prior.
Although COVID-19 cases and hospitalizations are trending upward with new variants, the numbers of serious cases have thus far remained at levels where activity has been able to continue. In fact, some restrictions such as the testing requirement to return to the United States from international travel has been removed.
Inflation remains a problem. A number of factors are contributing to keeping upward pressure on prices, including pandemic-related issues and the Russia invasion of Ukraine. The Federal Reserve has begun to take steps to slow the economy, and the difficulty will be tamping down inflation without causing a serious recession. Housing markets are responding to higher interest rates, with prices falling in some areas as mortgage rates price some buyers out of the market.
Recent surveys of consumers indicate that they are becoming less optimistic. Because spending on goods and services normally represents around 70% of the economy, that is a source of some concern. It is an unusual dynamic to have confidence sagging even as the economy adds jobs and shows other signs of strength, but consumer sentiment should begin to recover as inflation abates.
Despite these challenges, the US economy is expected to see significant growth. The Perryman Group’s most recent projections indicate real gross product is forecast to expand by +2.51% this year on a year-over-year basis, with +3.16% growth in 2023. Job gains are projected to be +5.728 million through 2022, with a gain of +3.571 million jobs next year.
About Dr. M. Ray Perryman and the Perryman Group
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.