May data from the US presents an interesting dilemma: more jobs is great, but rapidly rising wages could trigger an inflationary spiral. America has been balancing on an interesting edge in recent months – on one side we see positive signals, but on the other side warning signs are emerging that could change the entire game. For investors, it’s crucial to understand what’s really happening beneath the surface of these seemingly positive numbers.
Numbers Worth Your Attention
America added 139,000 new jobs in May – more than experts expected (126,000). Unemployment remained at 4.2%, which has been stable for three months.
At first glance, great news, but interesting paradoxes hide beneath the surface. While overall numbers look good, the private sector has problems and some sectors suffer from labor shortages. This situation creates a complex investment environment.
What’s Hidden Beneath the Surface
The problem lies in the details:
- Private sector added only 37,000 positions – worst result in two years
- Previous months were revised down by 95,000 positions
- Construction, restaurants, and logistics lack people – thousands of positions remain empty
Simply put: headline numbers look good, but labor market reality is more complex. These structural problems could affect future economic growth.
Wage Growth: Opportunity or Risk?
This is where it gets interesting. Average wages rose 0.4% per month, which is 3.9% annually. That sounds great for employees, but the Fed isn’t thrilled about this development.
Why? Rapidly rising wages could restart inflation. And the Fed has been fighting for years to get it under control. So instead of lowering interest rates, they might have to stay at higher levels longer. This monetary policy affects investment strategies.
Trump Factor: Fewer Immigrants = More Problems
Stricter immigration rules have unexpected consequences on the American economy. Many positions remain unfilled because domestic workers don’t want to do physically demanding work for lower wages.
The result? Companies must pay more to get people. And that pushes wages up even faster. The Brookings Institute warns that if immigration continues to decline, it could slow economic growth by 0.1 to 0.4%. This trend affects employment across sectors.
Investment Opportunities in Current Situation
Promising areas:
- Technology and healthcare – stable sectors with less dependence on manual labor
- Companies with automated production – don’t suffer from labor shortages
Riskier sectors:
- Sectors dependent on cheap labor – rising wage costs
- Companies with problems finding employees – operational challenges
Interesting fact: Silver reached a 13-year high. Investors are seeking alternatives to stocks due to labor market uncertainty.
Stability with Question Marks
The US labor market is currently like a person balancing on a rope – it’s holding for now, but nobody knows for how long. Numbers look decent, but problems are brewing beneath the surface.
For investors: Monitor wage statistics, immigration policy, and Fed reactions. And prepare for the possibility that current “stability” may not last forever.
The labor market often predicts economic changes. It might be showing us what’s coming.
