US adds 280,000 jobs in May as unemployment rate hit 5.5%

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US employers added 280,000 jobs in May, according to the latest jobs report out from the US Bureau of Labour Statistics Friday morning. Economists were forecasting an addition of 225,000 jobs.

The unemployment rate, which is drawn from a different survey, was 5.5% up slightly from 5.4% in April. In May 103,000 new entrants — people who have never previously worked — were unemployed.

The payroll count for March was revised up to 119,000 from the latest reading of 85,000. This is the second revision to the March reading which initially came in at 126,000 — already disappointing. April’s figure was revised up a down to 221,000 from 223,000. Total employment gains in March and April were therefore 32,000 higher than BLS previously reported. In the prior 12 months an average of 251,000 jobs were added.

Currently 8.7 million Americans are unemployed. At issue for months, however, has been the large percentage of people who are working part-time not by choice but because they had not better option.

The U-6 rate, which measures under-employment, came in at 10.8% in May unchanged from a month earlier and 12.1% a year earlier. This accounts for about 6.7 million workers.

In May average hourly earnings rose by eight cents to $24.96. The 12-month wage growth rate is 2.3%. Pre-crisis annual wage growth was north of 3%.

The labour force participation rate was little changed at 62.9%, this rate has been remained in a narrow 62.7% to 62.9% range since last April. The employment-population ratio was little changed at 59.4%.

Sectors hiring the most were business services (plus 63,000), leisure and hospitality (57,000) and health care (47,000). Employment in mining fell for the fifth month is a row with 17,000 jobs lost mostly in support activities. Mining employment has declined by 68,000 this year.

On Wednesday, payroll giant ADP said that private employers added 201,000 jobs last month. This was slightly above economists’ consensus estimate and the first month in three that the reading — considered a loose indicator for the BLS report — came in above 200,000, a level it consistently hit or exceeded in the second half of 2014 and early months of 2015.

Mark Zandi, Chief Economist of Moody’s Analytics (which works with ADP on the report), said at the time, “The job market posted a solid gain in May. Employment growth remains near the average of the past couple of years. At the current pace of job growth the economy will be back to full employment by this time next year. The only blemishes are the decline in mining jobs due to the collapse in oil prices and the decline in manufacturing due to the strong dollar.” (Forbes)