The US economy added a whopping 272,000 jobs in May. (Nam Y. Huh/AP/File via CNN Newsource)
US job growth shot higher in May, jumping to 272,000, much higher than expected, while the nation’s jobless rate broke a 27-month streak of below-4% unemployment.
May’s job gains are considerably higher than the April total, which was revised down to 165,000. The May data came in well above expectations for 180,000, according to Bureau of Labor Statistics data released Friday.
The unemployment rate rose to 4% from 3.9%. It’s the first time in more than two years that the jobless rate is not below 4%.
Service-providing industries accounted for the bulk of the month’s job gains, with health care and social assistance continuing to lead the way, with 83,500 jobs added.
Through May, the US economy has added an average of 247,800 jobs per month, which is roughly in line with the strong job growth seen last year. March’s and April’s estimated payroll gains were revised down slightly: March by 5,000 to 310,000; and April by 10,000 to 165,000.
A tale of two surveys
Friday’s jobs report, at initial glance, appears to be a mixed bag both for Americans and the Federal Reserve, which is wanting to see a slowing in demand to help tamp down inflation.
The strong job market has underpinned a robust period of consumer spending that has kept the economy churning — but has not helped in the inflation fight.
The surge in job gains and the rising unemployment offer a tale of two surveys: The monthly jobs report is composed of two surveys to measure employment levels and activity: one that surveys non-farm businesses about employment, hours and earnings, and the other of households to obtain the labor force status of the population with demographic details.
Employment fell in the household survey, while unemployment increased to just shy of 6.5 million and pushing the unemployment rate to the threshold of 4%. However, the household survey typically is more volatile than the establishment survey that showed payroll gains jumping higher.
“It is literally the height of confusion trying to make sense of one of the most divergent monthly employment reports that we can ever remember,” economist Chris Rupkey, of FwdBonds, wrote in a note issued Friday. “Is it safe out there for consumers and businesses or is the economy on the cusp of a recession?”
Wage gains came in hotter than expected as well, rising 0.4% from April and climbing to 4.1% over the year.
“A strong job market with persistently high wage growth was not what investors had hoped for,” Julia Pollak, chief economist at ZipRecruiter, wrote in a note Friday.
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