United States: Payrolls surge to five-month high, unemployment ticks up to 5.5% in May on increased participation
June 5, 2015
Non-farm payrolls grew by 280,000 in May, which was above April’s downward revised increase of 221,000 (previously reported: +223,000). May’s reading marked the largest increase in five months and exceeded market expectations of a 220,000 increase. The strong result tallied in April and May suggest that the economy rebounded in the second quarter after a weak start to the year.
The private sector was almost entirely responsible for new hiring, having added 262,000 jobs in May. The largest gains were registered in professional business services, healthcare and retail trade. The public sector added 18,000 jobs. The U.S. economy now has 3.3 million more people employed than at the pre-crisis January 2008 peak.
The unemployment rate—derived from a different survey—inched up from 5.4% in April to 5.5% in May. The print was just above market expectations of another 5.4% reading. The slight increase was driven by an increase in the labor participation rate from 62.8% to 62.9% as more people either started working or began looking for a job. The unemployment rate remained within the Fed’s target zone of 5.2%-5-5%. Moreover, there were stronger signs of wage growth in May compared to previous months. Average hourly earnings rose 0.3% over the previous month in May, pushing the annual growth rate up to 2.3%.
Author: Carl Kelly, Economist