The Economy

May Job Growth Much Higher Than Predicted

Latest jobs report may ease anxiety over how the U.S. economy would rebound from the first-quarter contraction.
Katie Kuehner-HebertJune 5, 2015

The U.S. created more jobs than predicted in May, easing fears that the first-quarter contraction might spell further trouble for the economy.

Total non-farm payroll employment increased by 280,000 in May, up from a revised 221,000 in April, the U.S. Department of Labor said Friday. The unemployment rate moved up slightly to 5.5%, from 5.4% a month earlier.

Economists expected a job growth of 226,000 in May, and the unemployment rate to hold at 5.4%, according to the Financial Times.

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The jobs report “comes against a backdrop of some anxiety” over how the economy would rebound from the first-quarter contraction brought on in part by the harsh winter, strong dollar, and a labor dispute at West Coast ports, the FT said. However, an improving labor market could spur the Federal Reserve to raise interest rates later this year.

“Although the pace of job creation has lost some of the vim it had in the final quarter of 2014 when the monthly average was 324,000 investors don’t fear it’s slowed enough to prevent the Fed from withdrawing more stimulus from the economy,” the FT wrote.

Job gains occurred in professional and business services, leisure and hospitality, and health care, while mining employment continued to decline, the Labor Department said.

The number of people unemployed for less than five weeks fell by 311,000, to 2.4 million in May, following an increase in April. The number of long-term unemployed (those jobless for 27 weeks or more) held at 2.5 million in May and accounted for 28.6% of the unemployed. Over the past 12 months, the number of long-term unemployed has fallen by 849,000.

The average hourly earnings for all employees on private non-farm payrolls rose by 8 cents in May, to $24.96. Over the year, average hourly earnings have risen by 2.3%. Average hourly earnings of private-sector production and non-supervisory employees rose by 6 cents, to $20.97.

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