In Alexandria, Virginia, a waiter bustles around a restaurant as the U.S. payrolls report for May outperforms expectations. The strong jobs gains in professional and business services, along with an increase in government employment, largely contributed to this success.
According to the Bureau of Labor Statistics, job creation in May was led by 64,000 new hires in professional and business services, following a similar increase in April. Government added 56,000 jobs last month, higher than the monthly average gain of 42,000 over the past 12 months. However, employment in government is still more than 200,000 jobs below pre-Covid pandemic levels.
Health care contributed 52,000 new jobs last month, while leisure and hospitality added 48,000, with food services and drinking places leading the increase in the industry that added an average of 77,000 jobs per month over the prior 12 months.
Overall, the U.S. economy added 339,000 jobs in May, exceeding the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth. Despite this positive news, the unemployment rate rose to 3.7% in May against the estimate for 3.5%, reaching its highest point since October 2022, though still near its lowest since 1969.
Despite the mixed bag of results, Olu Sonola, Head of U.S. Regional Economics at Fitch Ratings, notes the strength of the payroll survey and the robust job growth seen in the healthcare and professional and business services sectors. However, the 0.3% increase in the unemployment rate is the highest monthly increase since April 2020.
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