June 7, 2024 - NPR
Scott Horsley
Hiring rebounded in May, as U.S. employers added 272,000 jobs. A report from the Labor Department Friday showed significantly larger job gains than forecasters had predicted, with health care, hospitality and government each adding tens of thousands of workers during the month.
A separate survey used to calculate the unemployment rate paints a less rosy picture of the job market, however. Unemployment inched up to 4%, from 3.9% in February, even as some 250,000 people dropped out of the workforce. Although still very low by historical standards, that's the highest unemployment has been since January 2022.
The mixed signals could complicate the Federal Reserve's job as it tries to curb stubborn inflation. Fed policymakers are expected to hold interest rates steady when they meet next week. Investors are still betting on a rate cut by September, although the odds of that slipped on Friday after the stronger-than-expected jobs report.
Wage gains also accelerated in May, with average wages up 4.1% from a year ago. That could keep upward pressure on prices, leading the central bank to keep interest rates high.
Construction companies added 22,000 jobs in May, even though the construction industry typically suffers when interest rates are elevated. Manufacturing, which is also sensitive to high borrowing costs, added 8000 jobs.
One of the few industries that lost jobs last month was temporary help services, which shed more than 14,000 jobs. That's sometimes seen as an indicator of future employment trends, since businesses will often hire or fire temporary workers before adding or cutting permanent employees.