Employers continued to add jobs, but jobless rate ticked up in May


Employers continue to add jobs, but jobless rate ticks up in May
Employers continue to add jobs, but jobless rate ticks up in May

Data from the Bureau of Labor Statistics shows that the economy generated 175,000 jobs in May, which is consistent with the monthly average across the past 12 months. However, despite the solid job growth, it wasn't enough to buoy the unemployment rate, which ticked up 0.1 percentage point to 7.6 percent. 

The split report had analysts straddling the higher jobs numbers with the higher unemployment rate, but on the whole, many economists say the report is better than they expected. According to The New York Times, a series of foreboding data that was released in the weeks prior to the jobs data suggested hiring would have been worse. Still, many say that the rate of job growth from month to month typically wouldn't be enough to bring the unemployment rate down. 

At this rate, analysts say, it will take five years for unemployment to drop back to December 2007 levels, just before the recession hit. 

"It's a decent report, but it's not by any means robust," said Conrad DeQuadros, senior economist at research firm RDQ Economics. "It's certainly not strong enough to get the Fed to make any significant changes at its meeting in June."

Silver linings
When economists looked deeper at the hiring data, they found a bit of good news for the hiring market - it's growing. Although the unemployment rate rose slightly, the BLS said the number went "essentially unchanged" from April to May, and the increase likely means more people entered the labor force. This reflects a shifting mentality in job seekers, who feel that now, they at least have a chance of finding a job, compared to much more dismal days in the past. 

The official jobs information is in line with a recent poll the Times and CBS News conducted together, which found that 46 of respondents - who were polled between may 31 and June 4 - said they believed the job market was "very or fairly good" in their region. About one-third of these respondents said they expect their regional job markets to only get better in the months ahead.

The biggest gains in the report were in the professional and business services sectors, which include staffing companies and similar labor firms. The sectors together added 57,000 jobs last month, with the temporary help services industry alone contributing 26,000 of these positions. Computer systems design and related services saw the next-highest job growth at 6,000 new jobs, while the architectural and engineering services industry also saw notable growth of 5,000 jobs. 

In the past 12 months, the sector has added 589,000 new jobs. 

Experts weigh in
The report provided ample fodder for economists to give their two cents about what it means for the future of the jobs market. Alan Krueger, chairman of the Council of Economic Advisers, stated that the U.S. is well on its way to building a larger workforce.

"While more work remains to be done, today's employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression," he said. 

Conference Board economist Kathy Bostjancic stated that the report showed that political uncertainty has not affected hiring as much as many thought it would.

"[T]he resilient labor market sustained moderate job gains this spring," she wrote in an email to NPR. "The [federal] sequester, along with the negative impact from slowing global trade, are being offset by the continued contribution from the revival in the housing market and stronger consumption."

With 420,000 more people in the labor force than there were in April, analysts say many more expect they can find work in the near future.