U.S. Employment Surges In May But Unemployment Rate Climbs

RTTNews | 1205 days ago

(RTTNews) - The Labor Department released its closely watched monthly jobs report on Friday, showing U.S. employment surged by much more than expected in the month of May.

The report showed non-farm employment soared by 339,000 jobs in May after spiking by an upwardly revised 294,000 jobs in April.

Economists had expected employment to climb by 190,000 jobs compared to the jump of 253,000 jobs originally reported for the previous month.

The much stronger than expected job growth reflected increases in employment in the professional and business services, government, healthcare, construction, transportation and warehousing, and social assistance sectors.

Meanwhile, the Labor Department said the unemployment rate rose to 3.7 percent in May from 3.4 percent in April. The unemployment rate was expected to inch up to 3.5 percent.

The bigger than expected increase by the unemployment rate came as the household survey measure of employment tumbled by 310,000 persons, while the labor force grew by 130,000 persons.

The report also said average hourly employee earnings rose by $0.11 or 0.3 percent to $33.44. Annual wage growth slowed to 4.3 percent in May from 4.4 percent in April.

"It's hard to say which is the bigger surprise, the huge, unexpected rise in payrolls or the equally huge, unexpected rise in the unemployment rate," said Chris Low, Chief Economist at FHN Financial.

"From the Fed's perspective, the rise in unemployment coupled with the drop in average hourly earnings should outweigh the shock of another huge job gain," he added. "After all, the weaker numbers stand in support of a pause they were leaning toward anyway."

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