6:57 a.m. ET, June 7, 2024
Why this could be a report for the record books
Construction workers build a new structure near Terminal 5 at JFK airport in New York on May 28.
Alex Menendez/AP
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 the jobs report 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.”