Hiring momentum continued to grow in May as employers added 280,000 new jobs, surprising economists who had been expecting far less aggressive hiring.
It was the strongest gain since December, providing evidence that the slowdown earlier this year was a weather-caused blip, rather than a sign of a weakening economy. In addition, hourly pay for private sector workers increased by .3 percent, 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 percent since April 2014, the largest average gain since the recession began in 2008.
The report this morning from the U.S. Labor Department’s Bureau of Labor Statistics said the unemployment rate ticked up slightly to 5.5 percent, a result of some sidelined Americans deciding to rejoin 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 percent.
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 led 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.
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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.
- Employment services +26,100 with temp leading the way adding 20,100 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.
