Recession – Inflation – Stagflation – Bear Market. All words/phrases that have been bantered about in the past several weeks. The market analysts are looking for any indicator as to where this economy is headed. And there is no stronger indicator than the employment report. As we mentioned, there can be no recession while we have been adding almost a half-million jobs each month thus far this year.

This does not mean a slowdown in jobs growth is not on the way. As a matter of fact, a slow-down should be expected as we have replaced just about all the jobs which were lost in the pandemic-induced recession. The unemployment rate has hit near pre-pandemic levels as well. So, what did the numbers for May tell us? The addition of 390,000 jobs was lower than the previous months, but higher than expected. The unemployment rate remained at 3.6%. Slower, but certainly not an indication of an up-coming recession by any means.

Of major importance are the numbers for wage inflation. Wages grew 0.3% over the past month and 5.2% over the last year. These numbers were close to expectations and you can be sure the Governors of the Federal Reserve took note of these numbers as they consider their next moves when they meet next week. The markets have “baked in” a half-percent increase in short-term interest rates and will be more focused on what the Fed is saying about the future. Our guess is that the increase in jobs will solidify those predictions. We will know for sure in seven days.

Dave Hershman is the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School. Want to send this commentary and other news in a personalized format to your sphere database or on social media?  Sign up for a free trial at