A “Now Hiring” sign hangs near the entrance of a PetSmart store in Miami, Florida, on December 3, 2021.
Joe Reddell | Getty Images
The U.S. economy added far more jobs than expected in May, offsetting concerns about a slowing labor market and potentially weakening the Federal Reserve’s motivation to cut interest rates.
Nonfarm payrolls increased by 272,000 this month, up from 165,000 in April and well above the Dow Jones consensus estimate of 190,000.
At the same time, the unemployment rate rose to 4%, the first time it has exceeded this level since January 2022. However, the household survey used to calculate the unemployment rate showed the number of people saying they were employed fell by 408,000.
Job growth was concentrated in health care, government, leisure and hospitality, consistent with recent trends. These three sectors added 68,000, 43,000, and 42,000 new jobs respectively. These three sectors accounted for more than half of the gains.
Other areas showing significant growth include professional, scientific and technical services (32,000), social assistance (15,000) and retail sales (13,000).
In terms of wages, average hourly wages were also higher than expected, with a quarterly increase of 0.4% and a year-on-year increase of 4.1%. Growth forecasts are 0.3% and 3.9% respectively.
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