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The U.S. economy added jobs at a faster-than-expected pace in May, driven by strong hiring in the health care and government sectors that boosted overall employment.
Employer Added 272,000 jobs In its monthly payroll report released Friday, the Labor Department said payrolls in May increased significantly compared to a year ago. Economists at LSEG had expected a rise of 185,000, but the unemployment rate unexpectedly rose to 4%, overturning a view that it would remain stable at 3.9%, the highest level since January 2022.
“The May jobs report sent mixed messages,” said Bill Adams, chief economist at Comerica Bank. “Employment growth was solid and wage growth was accelerating, a sign that the labor market remains buoyant. Meanwhile, the unemployment rate is rising, recent job gains have been concentrated in part-time jobs, and temporary jobs are declining, a sign that the labor market is cooling.”
White-collar workers struggling to find work as labor market slows
The health care sector saw the largest job gains in May, adding 68,000 jobs last month, with job gains continuing in doctors’ offices (13,400), home health services (19,600), hospitals (15,000) and nursing homes and residential care facilities (10,600).
There were also significant increases within government last month, with employment increasing by 43,000. The majority of these jobs were within local authorities, excluding education (23,700), while the local authority education sector added 9,800 jobs to the headline figure.
U.S. employment rises by 272,000 in May, while unemployment unexpectedly rises
Hiring in the leisure and hospitality sector was the third-largest contributor to major job gains last month. The industry added 42,000 workers in May. Most of the gains came from bars and restaurants, which added 24,600 workers, while the entertainment, gambling and recreation industry added 10,200 workers.
A “Now Hiring” sign hangs at the NC Works Career Center in Wilmington, North Carolina, on March 7. (Alison Joyce/Bloomberg via Getty Images/Getty Images)
Other sectors that saw notable increases included professional and business services (33,000), construction (21,000), social assistance (15,200), and transportation and warehousing (10,600).
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Just one sector of the economy lost jobs last month, mining and logging, which lost 4,000 jobs. The job losses were driven by mining and quarrying, oil and gas extraction, and mining support activities.
of Lab Market The economy has remained historically tight over the past year, defying predictions of a slowdown from economists, who say the economy is starting to stabilize after last year’s torrid growth but is still far from recovering.
“Employment gains are not only large, but widespread,” said Nick Bunker, director of North American economic research at Indeed Hiring Lab. “However, while the labor market remains fairly strong, continued strong gains at this level are likely to be in question as job openings continue to decline and the economy cools.”
