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US Nonfarm Payrolls Surge in May, Unemployment Ticks Higher

US employment has rebounded sharply in the last two months, culminating in a much bigger than expected gain in May, while unemployment ticked up slightly as more Americans entered the labour force.

Employers added 280,000 nonfarm payrolls last month, following a downwardly revised gain of 221,000 in April that was originally reported as 223,000, the Labor Department said on Friday. Economists called for a monthly increase of 225,000 after ADP said on Wednesday private payrolls rose by 201,000.

Job creation averaged 207,000 over the past three months after nonfarm payroll employment was revised up to 119,000 from 85,000 in March.

Job gains in May occurred in professional and business services, leisure and hospitality, health care, retail trade, construction, transportation and warehousing and financial activities. Employment in mining tumbled for a fifth consecutive month.

The unemployment rate creeped up slightly from seven-year lows, reaching 5.5 percent compared with 5.4 percent in April. The workforce participation rate – the percentage of working-age Americans employed or actively searching for work – edged up slightly to 62.9 percent from 62.8 percent.

Average hourly earnings rose more than forecast, climbing 0.3 percent month-over-month. Compared to year-ago levels, average hourly earnings were up 2.3 percent, official data showed.

The Federal Reserve is likely to view Friday’s data favourably, but is unlikely to begin adjusting interest rates at this month’s policy meetings. Those meetings, to be held on June 16-17, will also be accompanied by revised GDP, inflation and unemployment estimates.

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