The May jobs report reveals a super-tight labor market for boomerang companies and a slowing one for others — and that might not be bad

More hyped than “Stranger Things”... at least by economists. Friday's monthly jobs report, aka: America's “Labor 101” report card, came at a critical time for the economy. The results: the booming job market cooled slightly in May. Key word: slightly.

• Job growth was stronger than expected, but eased. The US added 390K payrolls, the lowest since April 2021. Usually this number is enough to indicate the labor market's health. This time, not so much, since the problem isn’t demand for workers — it’s supply.
• Labor-force participation, perhaps more telling, nudged up to 62.3% — a sign Americans are slowly returning to work. Even though job openings dropped by 455K in April, there’s still 5M+ more open roles than available workers.
• Wage growth ticked down, rising 5.2% from a year earlier but still twice the rate that earnings were rising pre-pandemic, as companies bump pay to compete.

A tale of two markets... Unemployment stayed at a pandemic low of 3.6%, and rebounding sectors like hospitality can't hire fast enough. The paradox: sectors that thrived mid-pandemic are slowing hiring and cutting jobs to shave costs.

• We're hiring: Airlines, restaurants, hotels, and retailers are scrambling to boost headcount to meet demand — and have cut growth plans because they can’t. American Airlines has hired 16K employees this year and is still struggling to fill positions. Small businesses have been forced to slash hours and services.
• We're un-hiring: As inflation and slowing demand hit tech profits, Peloton, Netflix, Carvana, and others have laid off workers (Tesla reportedly plans to as well). Meanwhile: Microsoft, Meta, Salesforce, Twitter, Uber, Wayfair, and Snap say they’ll rein in hiring.