May job gains beat expectations, unemployment rate hits 18-year low
The May jobs report is out and it’s a big beat.
In May, the U.S. economy created 223,000 new jobs while the unemployment rate fell to a new post-crisis low of 3.8%, according to the latest release from the Bureau of Labor Statistics.
This is the lowest unemployment rate since April 2000. If the unemployment rate drops another 0.1% it’ll be the lowest since the 1960s.
According to estimates from Bloomberg, nonfarm payrolls were expected to grow by 190,000 while the unemployment rate was forecast to remain at 3.9% in May.
Wage gains were also better than expected in May, as average hourly earnings rose 0.3% over the prior month and 2.7% over the prior year. Economists had expected that wages would grow by 0.2% and 2.6% over last year. Many economists have said they’d expect wages to be rising by a faster rate given the low level of unemployment.
Ahead of Friday’s report, President Donald Trump tweeted, “Looking forward to seeing the employment numbers at 8:30 this morning.” The president and a few top advisors typically get access to the jobs report the evening before it is released to the public.
In May, the construction industry added 25,000 jobs, the most of any goods-producing industry. Overall, goods-producing industries saw 47,000 jobs created during the month.
Education and health services saw the biggest gains in May, with 39,000 new jobs created in this industry. May’s gains were broad-based across sectors, however, with just three industries seeing overall job losses.
In April, job gains disappointed, rising by 164,000 against expectations for a 193,000 job increase while the unemployment rate fell to 3.9%, the lowest since December 2000 and snapping what had been a six-month streak of the unemployment rate sitting at 4%. This data was revised on Friday to show that 159,000 jobs were created in April. Job gains have now averaged 179,000 over the last three months.
The labor force participation rate, which has remained stubbornly low since the financial crisis, hit 62.7% in May, a 0.1% decrease from the prior month.
The underemployment rate, which captures those who are out of work as well as folks working part-time but who would prefer full-time work, fell to a new post-crisis low of 7.6% in May. This is the lowest level for this rate since May 2001.
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
