Most economists were expecting the U.S. unemployment rate to rise slightly in May after the huge drop recorded in April. That was not the case. U.S. employers added 217,000 new jobs last month, putting the average for the last three months at 234,000, a step up from average gains of 197,000 over the last twelve months. The unemployment rate was unchanged at 6.3%, near a six-year low. Last month’s big drop in the unemployment rate came in large part because of a significant decline in the labor force participation rate. Economists were expecting a slight increase this month to compensate for the previous drop.
It was the fourth consecutive monthly gain above 200,000. According to the Labor Department, hiring came in at a steady pace, allowing employers to finally replace all the jobs lost during the recession. May’s job gains were led by the service sector with health and education adding 63,000 jobs and transportation adding just over 16,000. Gains were less broad based than in the previous month. The Labor Department’s diffusion index, which measures the sectors adding jobs, fell to 62.7% from 65.9%.
Source: Bureau of Labor Statistics.