|
 Nonfarm payrolls increased 280,000 last month, the largest gain
since December, the Labor Department said on Friday.
While the unemployment rate rose to 5.5 percent from a near
seven-year low of 5.4 percent in April, that was because more
people, including new college graduates, entered the labor force,
indicating confidence in the jobs market.
"Today's strong jobs report shows that the underlying trend in the
economy is continuing to improve. This leaves the Fed on course to
start hiking rates in September," said Michelle Meyer, senior
economist at Bank of America Merrill Lynch in New York.
The report joined May automobile sales and manufacturing data in
suggesting economic activity was gaining traction after a slow start
in the second quarter.
Doubts had sprung up in financial markets over whether the Fed would
be able to raise rates this year after a first-quarter contraction
in GDP and a string of weak data in April, including soft figures on
consumer spending and industrial production.
The jobs data helped dispel those doubts. The dollar raced to a
13-year peak versus the yen and surged against the euro. Prices for
U.S. government debt fell sharply, with the yield on the two-year
note rising to a more than four-year high.
Stocks on Wall Street ended mostly lower.
Average hourly earnings, which had long been the missing piece in
the jobs recovery and one closely watched by Fed policymakers, rose
eights cents. In addition, payrolls for March and April were revised
to show 32,000 more jobs created than previously reported, giving
the report a healthy glow.
Traders in futures markets brought up their expectations for a rate
hike to October from December. Fed officials, who have kept
overnight borrowing costs near zero since December 2008, meet on
June 16-17 to plot their course.
GAINING MOMENTUM
"First-quarter GDP is looking even more anomalous, and some of the
recent growth concerns should be mollified by the latest job growth
figures," said Michael Feroli, an economist JPMorgan in New York.
Economists had forecast payrolls rising 225,000 last month, with the
unemployment rate steady. May's payroll gains lifted job growth
above last year's average of 260,000 jobs per month.
Despite May's rise in the jobless rate, it remains not too far from
the 5.0-5.2 percent range that most Fed officials consider
consistent with full employment.
Policymakers will also be encouraged by the return of some
discouraged job seekers to the labor market.
The labor force participation rate, or the share of working-age
Americans who are employed or at least looking for a job, increased
0.1 percentage point to 62.9 percent, a four-month high. The number
of discouraged workers in May was the lowest since October 2008, and
the percentage of the working-age population employed hit its
highest level since June 2009.
[to top of second column] |
"These formerly frustrated workers are returning to the labor force
as a pick-up in hiring activity and record-high job openings have
been increasing their chances of finding a job," said Harm Bandholz,
chief U.S. economist at UniCredit Research in New York.
In May, 28.6 percent of the unemployed had been out of work for 27
weeks or more, the lowest rate in six years. A broad measure of
joblessness that includes people who want to work but have given up
searching and those working part-time because they cannot find
full-time employment was unchanged at 10.8 percent.
Last month's increase in average hourly earnings took the
year-on-year gain to 2.3 percent, the largest rise since August
2013. The mix of jobs gains and higher wages lifted the aggregate
weekly payrolls index, a proxy for take-home wages, 0.5 percent in
May and 4.9 percent over the year.
Further gains are expected given firming demand for entry-level
workers and a better composition of jobs that are being created. In
addition, many states have raised the minimum wage and some
corporations are increasing pay for workers.
Walmart <WMT.N>, the largest private employer in the United States,
this week announced it would raise minimum wages for more than
100,000 U.S. workers, its second wage hike this year.
Payroll gains last month were broad-based, though the mining sector
purged jobs again as it continued to work through the thousands of
cuts announced by oil-field companies. The 18,000 mining jobs lost
in May marked a fifth straight monthly decline.
Among sector heavyweights, Schlumberger <SLB.N> has announced about
20,000 layoffs this year, while Baker Hughes <BHI.N> and Halliburton
<HAL.N> are also cutting thousands of jobs.
Manufacturing employment increased 7,000, while construction
employment payrolls rose by 17,000.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Tim
Ahmann)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
