The U.S. economy added 272,000 jobs in May – above expectations – but the total number of unemployed increased to 6.6 million, raising the unemployment rate to 4.0%, according to estimates from the U.S. Bureau of Labor Statistics.
Employment continued to trend up in several industries, led by health care; government; leisure and hospitality; and professional, scientific, and technical services.
A year ago, the jobless rate was 3.7% and the number of unemployed people was 6.1 million.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed, at 1.4 million.
The long-term unemployed accounted for 20.7% of all unemployed people.
The labor force participation rate stood at 62.5% while the employment-population ratio was at 60.1% – both little changed in May.
Wages continued to increase gradually: The average hourly earnings for all employees on private nonfarm payrolls increased by 14 cents, or 0.4%, to $34.91.
Over the past 12 months, average hourly earnings have increased by 4.1%.
Average hourly earnings of private-sector production and nonsupervisory employees increased by 14 cents, or 0.5%, to $29.99.
“From the Fed’s perspective, this is a mixed report,” says Odeta Kushi, deputy chief economist for First American, in a statement. “Strong job and wage growth could keep inflation concerns high. However, the uptick in the unemployment rate may offset those worries.
“Additionally, other labor market reports, such as the JOLTS report, indicate a still strong, but gradually easing labor market,” Kushi says. “Notably, the ratio between the number of job openings and unemployed people decreased to 1.24, just above pre-pandemic levels.
“Ultimately, today’s jobs report alone is unlikely to shift the Fed’s stance,” Kushi adds. “The Fed will likely remain in a holding pattern, waiting for more data.”
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