Hiring momentum continued to grow in May as employers added 280,000 new jobs, surprising economists who had been expecting far less aggressive hiring.
Temp hiring was up a strong 20,100. Since the beginning of the year, the temp industry grew by 39,800 jobs. That’s significantly fewer than last the 53,900 added for the same five months last year. But like the national numbers, temp was hit hard by the severe weather at the beginning of the year, shedding 21,600 jobs in January and February.
Overall, this morning’s report from the Labor Department’s Bureau of Labor Statistics was more evidence that the slowdown earlier this year was weather-caused and not a sign of a weakening economy. In addition, hourly pay for private sector workers increased by .3%, the biggest gain in almost two years and a sign employers are beginning to respond to the tightening job market.
On an annualized basis, hourly wages rose 2.3% since April 2014, the largest average gain since the recession began in 2008.
Although the unemployment rate ticked up slightly to 5.5%, it was the result of sidelined Americans rejoining the labor force. The Labor Department’s so-called U-6 unemployment rate, which includes discouraged workers and those working part-time only because they can’t find full-time work, was unchanged in May at 10.8%.
Speaking to Bloomberg News, Joe LaVorgna, chief U.S. economist at Deutsche Bank Securities, said, “This only reinforces the view that the economy is a lot healthier than the GDP data imply. I’m pretty confident the unemployment rate will go back down again soon.”
His forecast of a 275,000 jobs gain was among the closest in the Bloomberg survey of economists. On average, the economists predicted May’s increase would be 226,000. Other surveys put the expected gain in the same range.
May’s increase was lead by the leisure and hospitality sector, which added 57,000 new jobs. More than a third of them — 14,400 — were from amusement parks, gambling and recreation services. Hotels, restaurants and bars added twice that many new workers.
Many, if not most, of those jobs are for temporary workers, brought on for the summer tourist season. Still, the sector has grown by almost 500,000 jobs in the past 12 months.
Perhaps a stronger sign the economy is growing and that consumers are more confident (the Consumer Confidence is 13 points higher than last year) was the big increase in retail hiring. The sector was up a total of 31,400 jobs. It was lead by auto dealers who added 7,700 workers. Clothing, furniture, electronics, and home improvement and garden centers also added jobs.
Construction jobs increased by 17,000.
Other big gainers were:
- Health care +46,800, with 27,600 added in ambulatory health services such as doctors’ offices.
- Private sector educational services added 16,700 new jobs.
- Financial services +13,000. 6,000 jobs were added in the insurance industry.
- Local governments added 15,000 workers.
- Manufacturing grew by 7,000 jobs.
The biggest losses were in mining, where the decline in the petroleum industry cost the economy 17,200 jobs.
The government also revised the initial numbers for March and April, March went from +85,000 to +119,000 and April’s initial 223,000 was revised to 221,000.
