The U.S. economy added a better-than-expected 175,000 new jobs in May, according to preliminary data from the U.S. Department of Labor, but the official unemployment rate rose to 7.6%. It was 7.5% the previous month.
The slight increase in the unemployment rate actually is considered good news because it means that more people, 420,000 more, entered the labor force and were actively looking for work than in the previous month.
Also in May, the private sector added 179,000 jobs, while government jobs fell by 4,000. The official unemployment rate is known as U-3, but the broader U-6 measure, which includes the unemployed and those working part time who want full-time work, ticked downward to 13.8, from 13.9 in April.
In addition, the government revised downward by 12,000 the payroll gains reported for the previous two months.
May’s report exceeded the 150,000-job benchmark, the number of new jobs needed to keep pace with changes in the labor force and the population, but fell well short of the 250,000 needed each month to quickly bring down the unemployment rate.
Other May reports showed mixed results. The monthly ADP report said the U.S. economy created only 135,000 jobs but noted that small businesses showed the largest gains with 58,000 new jobs. Medium-sized and large businesses each added 39,000 new positions, according to ADP, a payroll-processing firm.
For the week ending June 1, weekly initial unemployment claims fell by 11,000 from the previous week’s revised figure, reaching a seasonally adjusted 346,000. The four-week moving average was 352,500, an increase of 4,500 from the previous week’s revised average of 348,000, according to the Department of Labor.
During the past 12 months, the economy has created an average of 172,000 new jobs per month.
