Economy Adds 175,000 Jobs, Unemployment Rate Rises Slightly to 7.6%
Job growth in May beat economists’ expectations, coming in at 175,000 new positions added, which aligns closely with the yearly average. The unemployment rate rose ever so slightly, from 7.5 percent to 7.6 percent, a result of more people entering the work force, according to the Labor Department.
A Bloomberg survey of economists had predicted a total of 163,000 new jobs for the month, and the better-than-expected news led to a jump in the stock market. The rise in the unemployment rate may, oddly, be a good sign: that more people are feeling confident enough to get back into the labor market. About 420,000 people entered the work force, greater than the 319,000 jump in payrolls, which is the reason the rate went up despite the job growth.
Conrad DeQuadros, senior economist at the research firm RDQ Economics, told The New York Times, “It’s a decent report, but it’s not by any means robust.” It will take five more years’ worth of job growth at the current pace for the unemployment rate to fall to where it was in December 2007, when the Great Recession began.
Average hours worked per week went unchanged, at 34.5, much like average hourly earnings, which rose one cent, from $23.88 to $23.89. The last two jobs reports, from March and April, were slightly revised—up 4,000 for April and down 16,000 for March. Those changes did not affect the overall trend, which is one of steady, if slow, expansion.
The greatest force holding the economy back right now is probably the current sequestration policy coming out of Washington, which led to the government being the big job loser this month, pulling everything else down with it. The federal government shed 14,000 jobs in May, bringing the three-month total loss up to 45,000.