Key takeaways from the blowout May jobs report | CNN Business (2024)

Traders work on the floor of the New York Stock Exchange during afternoon trading on June 3 in New York City.

Stocks slipped on Friday to cap off a volatile day of trading, as investors parsed a stronger-than-expected May jobs report.

The Dow fell 87 points, or 0.2%. The S&P 500 slid 0.1% and the Nasdaq Composite lost 0.2%. Still, all three major indexes gained for the week.

The economy added 272,000 jobs last month, above expectations for 180,000 positions added. The unemployment rate rose to 4%, and wage growth rose for the first time in months, according to data from Bureau of Labor Statistics.

Investors waffled over the jobs report, leading to swings in the stock market. While strong jobs gains mean the US economy is unlikely to slide into a recession, it also means the Federal Reserve is unlikely to cut interest rates anytime soon. The central bank meets next week for its June policy meeting.

Traders are pricing in one to two rate cuts this year, according to the CME FedWatch Tool.

“We believe the Fed does want to cut this year, but a cut is unlikely to happen until September at the earliest,” wrote John Kerschner, portfolio manager at Janus Henderson Investors, in a Friday note.

As stocks settle after the close, levels might change slightly.

Of the two surveys that feed into the monthly jobs report, the establishment survey is often considered the “gold standard” by economists. The separate household survey, which provides greater detail on demographics and tees up the unemployment rate, is typically looked at as more volatile due to its smaller sample size and declining response rates.

That sample size is expected to get smaller, the Bureau of Labor Statistics confirmed Friday.

The BLS expects to reduce the survey by 5,000 households to 55,000 starting in 2025, Erika McEntarfer, the agency’s commissioner, said at the quarterly meeting of the Council of Professional Associations on Federal Statistics, according to Bloomberg, which first reported the move on Friday.

In an email response to CNN, BLS spokesperson Cody Parkinson confirmed the planned reduction.

“All surveys, including the CPS, are challenged by declining response rates and rising collection costs,” Parkinson wrote. “Flat budgets are not keeping up with these rising costs. Working together, BLS and the Census Bureau have for several years found ways to trim costs without reducing sample.”

Parkinson added: “As costs continue to increase, we estimate that a sample cut of about 5,000 households will be needed in Fiscal Year 2025. We will provide formal notice of any sample cut prior to implementation.”

A worker plasters a ceiling of a new housing complex on Feb. 22, 2024, in the southwest Portland, Oregon.

Job growth and wage growth are good for Americans and their livelihoods, but too much — especially of the latter — could be cause for some consternation among central bankers wanting to see slower inflation.

Stronger-than-expected wage gains for the month pushed up average hourly earnings to 4.1% over the past year, reversing a monthslong trend of cooling.

“TheFeddoesn’t directly target wages; but where the wages picked up are in the [service sector] areas where we’ve seen the mostinflation,” Diane Swonk, chief economist with KPMG, told CNN.

That’s in the service sector, everything from personal care services, cleaning and home maintenance, and vehicle maintenance, she said.

“And that is something that is hard for theFed, because in order for some of the increases we’re seeing in the service sector, we need to see offset in goods prices in order to bringinflationdown,” she said. “But you need a lot of that consistently to deal with stickierinflationthat we’re seeing in the service sector; and, unfortunately, wages matter more in particular areas whereinflationhas gotten stickiest.”

Whether the acceleration in wage gains keep things sticky, the proof will be in the pudding next week: The Consumer Price Index for May will provide a crucial look at the trajectory of inflation.

Coming out on Wednesday, the same day the Fed is set to announce its latest monetary policy decision, early economists’ projections are for consumer prices to have slowed on a monthly basis and for a key underlying inflation gauge to moderate as well.

A "Now Hiring" sign is seen at a Chipotle location on E 42nd Street on June 7 in New York City. A jobs report for the month of May released by Labor Department showed that the U.S. added employers added 272,000 nonagricultural jobs and also reported that the unemployment rate rose to 4 percent for the first time in more than two years.

May’s jobs report showed that, once again, service-providing sectors fueled employment gains, particularly the job-generating trio of health care, leisure and hospitality, and government (accounting for 60% of the gains).

However, the job growth seen in May was actually the most broad-based since January 2023, Bureau of Labor Statistics data shows.

The BLS’ “diffusion index,” which is a measurement of the percentage of industries that are adding or losing jobs, hit 63.4 in May. That means that 63.4% of 250 key private-sector industries tracked by the BLS added jobs last month.

That’s well above the 56.6% seen in April, and it marks the highest level for the index since the start of last year.

“But just because [the health care, leisure and government] sectors are powering ahead doesn’t mean other sectors are weak,” Nick Bunker, economic research director for North America at the Indeed Hiring Lab, wrote in a note issued Friday. “Interest rate-sensitive sectors, including construction and manufacturing, are still adding jobs. The gains are still broad-based.”

Construction added an estimated 21,000 jobs while manufacturing added 8,000 positions, the highest monthly gain seen so far this year, BLS data shows.

Attendees at a healthcare career fair at Cape Fear Community College in Wilmington, North Carolina, on Feb. 28, 2023.

There’s been a full rebound from the Covid-19-era “she-cession:” Not only have women’s labor force participation rates returned to their pre-pandemic form of strong gains, they’re also setting record highs month after month.

In May, the employment rate of women in their prime working years (25 to 54 years of age) ticked up to a new all-time high of 78.1%, Bureau of Labor Statistics data shows.

Prior to the pandemic, women’s labor force participation rates rose faster than their male counterparts as female-dominated industries such as health care and caregiving saw rapid growth; educational attainment for women rose substantially; and there were greater inroads by women into traditionally male-dominated fields such as construction, agriculture, and maintenance.

Since the pandemic, other developments helped serve as further drivers: increased work flexibility and strong job gains in female-dominated industries such as health care.

Still, the overall labor force participation rate dipped in May to 62.5% from 62.7%, reversing progress made earlier this year.

“The sharp rebound in immigration over the past two years had been a key factor driving the labor supply higher, so the recent slowdown in immigration flows is likely acting as a restraint,” Lydia Boussour, senior economist for EY, wrote in a note Friday.

When hiring slowed sharply in April, many wondered if the jobs market had entered a new trend of weaker growth. The May jobs report suggests that is not the case.

“It appears that the rumors of the death of the labor market were an exaggeration,” Thomas Simmons, US economist at Jefferies, wrote in a report to clients Friday.

Simmons said it looks like April was an “anomaly, not the death knell” and hiring is “back on track.”

Joe Brusuelas, chief economist at RSM, told CNN the May jobs report was “very strong” and dismissed the unemployment rate increase as “statistical noise.”

“It’s still the strongest labor market since the 1950s,” Brusuelas said. “Good news is good news.”

The jobs market is so strong that it has forced Wall Street to dial back bets on rate cuts.

There’s just a 54% chance priced into the market for at least one rate cut by the Fed’s September meeting, the final one before the election.

“A July cut is also likely a pipe dream, and it’s unlikely that things will fall apart quickly enough before September for a cut as well,” Simmons from Jefferies said.

A bartender prepares a drink in Le Central restaurant in San Francisco, California, on May 7.

America’s still-strong job market is proving to be a sturdy pillar of strength for the broadereconomy— one that isn’t cracking just yet.

There’s a reason why Wall Street, the White House and other institutions pay such close attention to the Labor Department’s monthlyemploymentreport released on the first Friday of every month; it’s a key gauge of theeconomy’s health. If Americans are getting hired and commanding strong wage growth, then they’ll be able to spend, which is the main driver of economic growth.

Fears that theeconomyis deteriorating fast aren’t bearing out. Payroll growth in April came in below expectations and consumer spending also slowed notably that month. But data stretching over several months is showing that April’s weaker-than-expected figures were likely just noise and not reflective of a new trend.

Through May, employers have added an average of 247,800jobsper month, similar to last year’s robust trend. Retail spending was flat in April, but in the six months through April, retail sales have only declined twice. And the latest decline in January was largely due to unseasonably cold weather.

Theeconomyis still expected to slow further in the second half of the year, but it’ll just reflect a continued “normalization” rather than a concerning slowdown,Garrett Melson, portfolio strategist at Natixis Investment Managers, told CNN.

Stocks turned positive after a bumpy start to Friday’s session.

The Dow rose 217 points, or 0.6%. The S&P 500 gained 0.3% and the Nasdaq Composite added 0.1%.

Investors continued to chew on the May jobs report, which showed strong job growth in May but an uptick in unemployment.

U.S. President Joe Biden gestures as he arrives at Carpiquet airport in Caen, France, today.

President Joe Biden touted May’s jobs report in a statement Friday, writing, “The great American comeback continues, but we still have to make more progress.”

“Unemployment has been at or below 4% for 30 months — the longest stretch in 50 years,” he noted, while lauding how “a record high share of working-age women have jobs.”

In the statement, the president pledged to “keep fighting to lower costs for families like the ones I grew up with in Scranton,” while hitting Republicans in Congress for “a different vision — one that puts billionaires and special interests first.”

Stocks turned mixed Friday morning as investors continued to parse the stronger-than-expected jobs report.

The Dow rose 43 points, or 0.1%, recovering earlier losses. The S&P 500 slipped 0.05% and the Nasdaq Composite lost 0.2%.

Attendees at a City Career Fair hiring event in Sacramento, California, on June 5, 2024.

At a time when Americans and theFederal Reserveare clamoring for clear-cut data about the state of theeconomy, Friday’sjobsreport was much more opaque than everyone had hoped.

While “it’s hard not to like a lot ofjobs,” as economist Dean Baker told CNNBusinessin an interview, other contents of the Mayjobsreport add to the pile of unwelcome economic news that’s included slower GDP growth, a pullback in some spending, and a rise in credit card delinquencies

“The good news is we saw the explosion in payrolls. The bad news is the rise inunemploymentwith an acceleration in wage gains,” Diane Swonk, chief economist with KPMG, told CNN.

Theunemploymentrate rose to 4% from 3.9%. It’s the first time in more than two years that the jobless rate is not below 4%.

Stronger-than-expected wage gains for the month pushed up average hourly earnings to 4.1% over the past year, reversing a monthslong trend of cooling.

“TheFeddoesn’t directly target wages; but where the wages picked up are in the [service sector] areas where we’ve seen the mostinflation,” Swonk said.

That’s in the service sector, everything from personal care services, dry cleaning, cleaning and home maintenance and vehicle maintenance, she said.

“And that is something that is hard for theFed, because in order for some of the increases we’re seeing in the service sector, we need to see offset in goods prices in order to bringinflationdown,” she said. “But you need a lot of that consistently to deal with stickierinflationthat we’re seeing in the service sector; and, unfortunately, wages matter more in particular areas whereinflationhas gotten stickiest.”

Read more here.

America’s hot job market isn’t setting the stage for theFederal Reserveto begin cutting interestrates, unlike other central banks that have already begun to lower borrowing costs.

The Mayjobsreport showed that employers are continuing to hire at a brisk pace and that workers are still commanding robust wage gains. A strong US job market keeps theFedpatiently waiting for more economic data to prove thatinflationis headed toward the 2% target. The central bank is tasked by Congress to stabilize prices and maximizeemployment, so if there isn’t any fears that the job market is deteriorating, it can focus on defeatinginflationby keepingrateselevated.

That’s in contrast with what’s happening in other major economies that have been experiencinginflationand the central bank response of higher interestrates. The Bank of Canada was the first G7 central bank to cut interestratesthis week. The following day, the European Central Bank also lowered borrowing costs for the 20-nation eurozone bloc for the first time in nearly five years.

For a central bank to begin cutting interestrates, officials need to “gain enough confidence” thatinflationhas cooled enough and is on track to slow further, based on their assessment of the broadereconomy’s health and the outlook.

A common phrase among central bankers is that they will make monetary policy decisions on a “meeting-by-meeting” basis. And there are also risks if a central bank cuts too soon, which could result ininflationreigniting, and if it cuts too late, which could fail to prevent an unnecessary recession.

People walk past the New York Stock Exchange (NYSE) on June 4.

Stocks slipped Friday morning after fresh data showed that the US jobs market stayed piping hot last month.

The Dow fell 92 points, or 0.2%. The S&P 500 slipped 0.3% and the Nasdaq Composite lost 0.4%.

The economy added 272,000 jobs last month, above expectations for 180,000 positions added. The unemployment rate rose to 4% from 3.9%, according to the Bureau of Labor Statistics data.

Wage growth rose for the first time in months. Workers made $34.91 an hour on average in May, up 14 cents, or 0.4%, from April. Average hourly earnings rose 4.1% from the prior year.

The latest jobs report is a double-edged sword for Wall Street. On one hand, a resilient job market lessens the chance that the economy will tip into recession. But it also puts long-awaited rate cuts from the Federal Reserve on the back burner.

Treasury yields rose following the report. The 10-year yield topped 4.4%.

Commuters at a subway station in New York, on April 25, 2024.

Americans’ paychecks grew at a faster pace for the first time in months.

That’s great news for workers, especially considering that the cost of living has become tougher in recent years, but it points to some underlyinginflationpressure. That won’t help build a case for theFederal Reserveto begin cutting interestratesanytime soon.

Workers made $34.91 an hour, on average, in May. That’s an increase of 14 cents from April, or 0.4%. From a year earlier, average hourly earnings were up 4.1% last month.

Wage growth has been steadily trending down over the past year and is well below the nearly-6% annual increase in March 2022. While it means that Americans’ wallets have continued to fatten these past few years, it’s an issue for theFedbecause it might stand in the way ofinflationinching closer to the central bank’s 2% target. That’s because high labor costs can be passed on to consumers, though it’s important to note that Americans can rake in robust wage gains without stokinginflation — if labor productivity is keeping up. It remains to be seen if last year’s productivity boom will persist this year.

And even if wage growth resumes slowing in the coming months, it is still well above pre-pandemic trends. From 2007 to 2020 (when the pandemic distorted economic trends), year-over-year wage growth never rose above 3.7%.

A 'Now Hiring' sign is displayed outside a resale clothing shop on June 2, 2023 in Los Angeles, California.

Friday’sjobsreport, at initial glance, appears to be a mixed bag both for Americans and theFederal Reserve, which is wanting to see a slowing in demand to help tamp downinflation.

The strongjobsmarket has underpinned a robust period of consumer spending that has kept theeconomychurning but also didn’t help in theinflationfight.

The surge in job gains and the risingunemploymentoffers a tale of two surveys: The monthlyjobsreport is composed of two surveys to measureemploymentlevels and activity: one that surveys non-farm businesses aboutemployment, hours and earnings, and the other of households to obtain the labor force status of the population with demographic details.

Employmentfell in the household survey, whileunemploymentincreased to just shy of 6.5 million and pushing theunemploymentrate to the threshold of 4%. However, the household survey typically is more volatile than the establishment survey that showed payroll gains jumping higher.

“Is it safe out there for consumers and businesses or is theeconomyon the cusp of a recession?” wrote economist Chris Rupkey of FwdBonds in a note issued Friday.

The Federal Reserve building is shown May 2, 2023 in Washington, DC.

The robust Mayjobsreport dashed Wall Street’s hopes that theFederal Reservecould begin cutting interestratesin September.

Both hiring and wage growth picked up last month, suggesting that America’s job market is still running hot. That could stand in the way ofinflationcooling down all the way to theFed’s 2% target. Traders weren’t too giddy about Friday’semploymentreport, at least when it comes to rate cut prospects.

Investors now think that it’s more likely that theFedwill hold interestratessteady at its September meeting than begin cutting, according to futures.

Wall Street’s best bet for the first rate cut is now December, the CME FedWatch Tool shows.

Friday’s jobs report is “literally the height of confusion,” wrote Christopher Rupkey, chief economist at FwdBonds, noting the difficulty in “trying to make sense of one of the most divergent monthly employment reports that we can ever remember.”

“This is not a day for economists to pick up the phone and answer questions about the monthly jobs report, as today’s numbers defy explanation on whether the economy is running hot or going down for the count, over the cliff into the depths of recession,” he wrote in a note Friday morning.

“The economy may be at a turning point and we don’t mean in a good way. Bet on it.”

Here’s what investors and economists have to say about last month’s stronger-than-expected jobs growth:

The U.S. flag is magnified in Federal Reserve Bank Chair Jerome Powell's glasses as he announces that interest rates will remain unchanged during a news conference at the bank's William McChesney Martin building on May 1 in Washington, DC.

Friday’s jobs report showed the US unemployment rate has now hit 4%. It hadn’t crossed that mark in more than two years, a remarkable streak that hasn’t been matched in decades.

But many economists thought the jobless rate would be well above 4% before now, given all the rate hikes aimed at slowing the economy to curb inflation.

What would that mean for the Federal Reserve? Not a whole lot, Fed Chair Jerome Powell said last month.

It would take a material weakening in the labor market to catch central bankers’ attention and potentially cause them to consider cutting rates sooner.

A couple of tenths of a percentage point increase in the unemployment rate “would probably not do that,” Powell said.

Traders work on the floor of the New York Stock Exchange during morning trading on May 24.

US stocks moved lower on Friday morning after fresh data revealed the jobs market revved up again in May.

Futures tied to the Dow fell 149 points, or 0.4%. S&P 500 futures slipped 0.3% and Nasdaq-100 futures lost 0.2%.

The US economy saw 272,000 job gains last month, racing past economists’ expectations for 180,000. The unemployment rate rose to 4%, Bureau of Labor Statistics data showed.

Bond yields rose Friday morning. The 10-year US Treasury yield rose to 4.4%.

A jobseeker looks at displays at a job fair at Brunswick Community College in Bolivia, North Carolina, on April 11.

The US economy added 272,000 jobs last month, significantly more than the 180,000 that economists had expected.

The jobless rate rose to 4% from 3.9%, according to Bureau of Labor Statistics data released Friday.

The Fed has been closely watching wage growth out of concern that faster-than-typical pay gains may put upward pressure on inflation.

Wage gains have slowed, but have been outpacing inflation for almost a year now. That means it’s easier to afford the higher cost of living as opposed to recent years when price increases completely wiped out wage gains. They also remain above pre-pandemic levels.

Economists are expecting for average hourly earnings to hold steady at an annual growth rate of 3.9%, which is about 0.9 percentage points higher than in February 2020, BLS data shows.

However, the bad news is that wage gains are not slowing by as much as the Federal Reserve would like to help rein in inflation. The slower pace of pay bumps is a sign that workers are losing some of the leverage they gained post-pandemic.

Pedestrians walk past the New York Stock Exchange building on March in New York.

Here’s what Wall Street will be looking for:

May’s jobs report from the Bureau of Labor Statistics, due out Friday at 8:30 am ET, could show a slowing in the labor market.

Economists are expecting job growth of 180,000 payrolls and an unemployment rate that holds tight at 3.9%.

If the jobless rate stays below 4%, it would extend a streak not seen since the early 1950s.

Data released in advance of Friday’s report has underscored that job openings are shrinking, hiring is slowing and people aren’t quitting as much. However, layoff activity remains muted.

Traders work on the floor of the New York Stock Exchange during morning trading on May 31 in New York City.

US stocks were mixed in premarket trading Friday.

Both the S&P 500 and Nasdaq Composite hit new record highs this week as shares of chip-making giant Nvidia soared.

Nvidia crossed the $3 trillion market cap mark and pulled ahead of Apple to become the second-largest publicly traded company in the United States.

But traders are now laser focused on Friday’sjobsnumbers, which should provide Wall Street with more context about the state of theeconomyand clues about what theFederal Reservemay do next.

Construction workers build a new structure near Terminal 5 at JFK airport in New York on May 28.

The May jobs report could cement a trend that the US hasn’t seen since the early 1950s.

That’s because if the jobless rate comes in as expected, it would mark the 28th consecutive month of sub-4% unemployment — the longest streak in more than 70 years.

“If unemployment stays below 4% for the 28th consecutive month, it will be cause for celebration,” economist Dean Baker, co-founder of the Center for Economic and Policy Research, wrote in a note on Tuesday.

“If the other data in thejobsreport looks like they did in April, then it should help the Fed feel more comfortable about lowering interest rates.”

If the unemployment rate were to come in at or above 4% — something that’s not expected, given broader labor data but also not impossible, because the data that feeds into the monthly measurement is volatile — it could have a psychological effect, said Julia Pollak, chief economist with online job site ZipRecruiter.

“4% is thought of as a magical number — a number below which participation rises, below which we tend to see employment rates increase faster for women and for minorities,” she said.

“Employers in a tight labor market, they have to do extraordinary things; they have to cast a wider net; they have to actively recruit non-traditional candidates; they have to offer more attractive job conditions, more flexibility, think about installing air conditioning in their trucks or offering a bus to employees. So, it is kind of a magical number.”

People cross a street in front the headquarters building of the European Central Bank (ECB) in Frankfurt am Main, western Germany, on June 5.

The European Central Bank cut interest rates Thursday, moving before the US Federal Reserve and the Bank of England to lower borrowing costs as inflation recedes followingyears of rate hikes.

The first ECB rate cut in nearly five years takes the benchmark rate in the 20 countries that use the euro down to 3.75% froman all-time high of 4%, where it had stood since September.

The ECB’s decision follows a rate cut by theBank of CanadaWednesday, which became the first G7 central bank to reduce borrowing costs in the past few years. Central banks inSwitzerlandand Sweden have also cut interest rates this year.

Traders are all but certain the Fed will keep rates on hold at its meeting next week, and again in July. The Bank of England is likewise not expected to cut rates at its meeting on June 20, which comes just weeks before the UK holds a general election.

Job growth slowed more than expected in the private sector, according to data released on Wednesday, highlighting a continued cooling in the US labor market.

US private employers added an estimated 152,000jobsin May, according to new data from payroll processor ADP. Last month’s projected gains represented a pullback from the downwardly revised 188,000jobsadded in April and fell below economists’ expectations for 175,000jobsadded.

“Job gains and pay growth are slowing going into the second half of the year,” Nela Richardson, chief economist for ADP, said in a statement. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”

The lion’s share of the gains came from service-providing industries such as trade and transportation, health care, and leisure and hospitality. The manufacturing sector saw the sharpest drop injobs, with an estimated net loss of 20,000 positions.

The latest ADP report also showed that wage growth held steady for “job-stayers” at 5%, while “job-changers” saw a slowing to 7.8%.

The ADP report is an independent measure ofemploymenttrends and is developed using anonymized and aggregated payroll data from its clients.

While ADP’s tabulations don’t always correlate with Friday’s closely watched monthlyjobsreport, it’s sometimes viewed as a proxy for overall hiring activity.

People walk by a posted "Now hiring" sign on March 8 in San Rafael, California.

The jobs report is based on two surveys – one ofbusinesses with payrollsand one ofhouseholds about their economic situation– that are conducted by the government mid-month and released by the Bureau of Labor Statistics in tandem on the first Friday of each month.

The gap between job growth in those two surveys increased in April, as the 175,000 newjobsreported in the establishment survey exceeded the 25,000 gain inemploymentreported in the household survey, wrote Center for Economic and Policy Research founder Dean Baker this week.

“The establishment survey is generally more accurate since it is far larger and has a much higher response rate,” he noted.

However, the most recent Quarterly Census onEmploymentand Wages “supports the case that there could be a substantial overstatement ofemploymentin the establishment survey.”

If that’s the case, then “a slower pace of job creation than currently reported by the Current Employment Statistics would translate directly into a more rapid rate of productivity growth. This would mean that theeconomycould support a more rapid pace of wage growth without leading toinflation.”

An attendee hands a recruiter a resume at a City Career Fair hiring event in Sacramento, California, on June 5.

In 2019, the share of unemployment due to voluntary quits averaged 13.6%. In April 2024, it measured 12%, CEPR’s Dean Baker noted earlier this week.

“One anomaly in recent job reports has been the relatively small share of unemployment due to voluntary quits,” he wrote.

“This is a measure of people’s confidence in the labor market, since it indicates that they are willing to leave a job before they have a new one lined up.”

Pedestrians walk along Wall Street near the New York Stock Exchange on February 16.

A report released Thursday showed that fewer job cuts were announced in May than both the month and year before.

US-based employers announced 63,816 job cuts last month, down 1.5% from April and 20% below May 2023, according to a Challenger, Gray & Christmas report released Thursday.

“Job cuts remained flat in May as companies assess performance and make plans for [the third and fourth quarter],” Andrew Challenger, senior vice president of the outplacement and business research firm, said in a statement.

However, Challenger also cautioned that the slowdown in activity could be an indication of not merely softness but of weakening.

“Meanwhile, hiring announcements are at their lowest levels in a decade,” he said. “The typical churn in a healthy labor market appears to be stalling.”

An American flag flies from a crane as a construction worker helps build an apartment complex on January 25 in Los Angeles, California.

Foreign born residents of the US had higher labor force participation rates but lower weekly earnings than those born in America last year, according to a recent Bureau of Labor Statistics report.

Nearly 67% of the foreign born participated in the labor force in 2023, compared to just under 62% of the native born, according to the agency’s annual Labor Force Characteristics of Foreign-born Workers summary.

The report looks at this key part of American’s economic engine – workers who were born outside of the US and who do not have parents who are US citizens. The foreign born include legally admitted immigrants, refugees, temporary residents and undocumented immigrants.

There was a big divide between the participation rates of men and women. Nearly 78% of foreign-born men were in the labor force, compared to about 66% of native-born men. Among foreign-born women, roughly 56% participated in the workforce, compared to nearly 58% of their native-born counterparts.

Foreign-born full-time wage and salary workers had typical usual weekly earnings of $987 last year, compared to $1,140 for native-born workers. Foreign-born men had weekly earnings of $1,051, compared to $1,238 for native-born men, while foreign-born women had weekly earnings of $899, compared to $1,025 for their native-born counterparts.

The differences in earnings reflect several factors, including variations in educational attainment, occupation, industry and geographic region, according to the agency. For instance, foreign-born workers were less likely to have high school or college degrees and less likely to work in management, professional, sales and office occupations than native-born workers. The foreign born were more likely to work in service, construction and maintenance jobs, among other occupations, which often pay less.

Some 3.6% of the foreign born were unemployed last year – the same share as the native born. However, while the unemployment rate for the native born is below its pre-pandemic level, the rate for the foreign born is higher than it was prior to the Covid-19 pandemic.

Nearly half of foreign-born workers were Hispanic, while Asians accounted for one-quarter. Just over 15% of foreign-born workers were White, and nearly 11% were Black.