The Bureau of Labor Statistics reported the economy added 223,000 jobs in May. With upward revisions to the prior two months' data, this brought the three-month average gain to 179,000. The job growth also pushed down the unemployment rate to 3.8 percent, tying a low hit in 2000 (the next previous low is December 1969). The unemployment rate for blacks fell to 5.9 percent, an all-time low.

In spite of the positive news on job growth and the unemployment rate, there is no evidence of an acceleration of wage growth, with year-over-year wage growth coming to 2.7 percent — roughly the same pace as we have seen over the last year. For all the talk of a labor shortage, we also are not seeing any notable uptick in average weekly hours. The length of the workweek overall was unchanged in May, and it actually fell by 0.2 hours in manufacturing. If employers are really having trouble finding workers we would expect them to be getting more hours out of the workers they have, but this isn't happening.