The U.S. economy created 280,000 jobs in May and the unemployment rate ticked up slightly to 5.5 percent as more Americans started looking for work, the federal Department of Labor reported today.
The gain was the largest since December and was sharply higher than the consensus forecasts of economists who were surveyed by Bloomberg, the Wall Street Journal and MarketWatch. Economists in a Bloomberg survey predicted a May job gain of 225,000. Those consulted by the Wall Street Journal forecast an increase of 220,000, and those surveyed by MarketWatch expected a gain of 218,000.
“This only reinforces the view that the economy is a lot healthier than the GDP data imply,” Joe LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, told Bloomberg.
His projection for a 275,000 gain was among the closest in the Bloomberg survey.
“I’m pretty confident the unemployment rate will go back down again soon,” LaVorgna added.
The government also reported that average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents, to $24.96, in May. During the year, average hourly earnings have risen by 2.3 percent. Average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents, to $20.97, in May.
The robust jobs report appeared to improve the prospects for an interest-rate increase later this year.
"This certainly puts more ammunition in the Fed's plan to start lift-off in September," Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters.
The government said there were job gains in professional and business services, leisure and hospitality, and health care.
It also said the number of people who were unemployed for fewer than five weeks decreased by 311,000, to 2.4 million, in May, after an increase in April. The number of long-term unemployed (those who have been jobless for 27 weeks or more) held at 2.5 million in May and accounted for 28.6 percent of those without jobs.
The number of people who were employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was about unchanged in May, at 6.7 million, and the government said the figure has shown little movement in recent months. Those people, who would have preferred a full-time job, were working part time because their hours had been cut or because they were unable to find a full-time job.
In May, 1.9 million people were marginally attached to the labor force, down by 268,000 from a year earlier. (The data are not seasonally adjusted.) Those people were not in the labor force, wanted and were available for work and had looked for a job some time in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks that preceded the government’s survey.
The government revised its figures for March and April to a net gain of 32,000 more jobs for those two months. The gain in March was revised upward from 85,000 jobs to 119,000, and the April total was revised downward from a gain of 223,000 jobs to an increase of 221,000.