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Nam Y. Hu/AP/File
Economists had expected payrolls to add 180,000 in May and the unemployment rate to remain steady at 3.9 percent.
CNN
—
U.S. payrolls surged to a much stronger-than-expected 272,000 in May, while the unemployment rate snapped a record 27 consecutive months below 4%.
The May payroll gain is significantly higher than April’s total, which was revised downward to 165,000. Bureau of Labor Statistics data released Friday showed the May data came in well above expectations of 180,000.
The unemployment rate rose to 4% from 3.9%, the first time in more than two years that the unemployment rate has not fallen below 4%.
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Service-providing industries accounted for the majority of job gains this month, with health care and social assistance continuing to lead the way, adding 83,500 jobs.
Through May, the U.S. economy was adding an average of 247,800 jobs per month, roughly in line with last year’s robust job growth. Estimates for payroll gains in March and April were revised down slightly, down 5,000 to 310,000 in March and 10,000 to 165,000 in April.
At first glance, Friday’s jobs report seems like a mixed blessing for both Americans and the Federal Reserve, which is hoping for a slowdown in demand to tame inflation.
A strong job market has supported robust consumer spending that has fueled the economy but hasn’t helped fight inflation.
The surge in job growth and rising unemployment rate is told from two surveys. The monthly employment report is made up of two surveys that measure employment levels and activity: one that surveys nonfarm businesses on employment, hours worked and income, and one that surveys households to capture the labor force status of the population along with demographic details.
The household survey showed a fall in the number of employed people while the number of unemployed rose to just under 6.5 million, pushing the unemployment rate up to the 4% threshold. But the household survey is typically more volatile than the establishment survey, which has seen a surge in payroll growth.
“Trying to make sense of one of the most contradictory monthly jobs reports in living memory is literally confusing,” Chris Rupkey, an economist at FwdBonds, wrote in a note on Friday. “Are markets safe for consumers and businesses, or is the economy on the brink of a recession?”
Wage growth also beat expectations, rising 0.4% from April to 4.1% for the year.
“A robust job market with sustained high wage growth was not what investors were hoping for,” ZipRecruiter chief economist Julia Pollack wrote in a Friday note.
This story is developing and will be updated.
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