Worries that the Federal Reserve could begin tapering its bond-buying program earlier than previously thought, along with a spate of less-than-stellar economic data, made May’s jobs report the most important in recent memory.
It didn’t disappoint.
The pace of hiring accelerated month-to-month to exceed economists forecasts. Non-farm payrolls rose by 175,000 in May, better than expectations for 165,000 new jobs, the Department of Labor said Friday.
The unemployment rate, which is derived from a separate survey, ticked up to 7.6% from 7.5% a month ago. Economists were looking for the unemployment rate to remain unchanged.
But the rise in the unemployment rate isn’t really bad news because it was driven by more people looking for work, as the labor force jumped by 420,000.
However, as always, whether folks actually landed jobs greatly depended on the industry they were targeting.
Drilling down into the Bureau of Labor Statistics’ April Employment Situation Report showed areas of strength in professional and business services, food services and drinking places, and retail trade.
Professional and business services added 57,000 jobs in May, led by temporary help services, computer systems design and related services, and architectural and engineering services, the Labor Department said. The increase in temporary help services is an encouraging sign, since gains in temp work usually serve as a prelude to more full-time hiring.
The leisure and hospitality industry was also a decent place for job-seekers in May, as employment in food services and drinking places rose by 38,000 during the month. The sector has now added 337,000 jobs in the past year.
Retail trade was another area of relatively strong job creation last month, as employment increased by 29,000, led by general merchandise stores. The retail sector has now added an average of 20,000 jobs per month in the last 12 months.
Healthcare continued be a good area for job seekers in May, adding a net of 11,000 positions. Home healthcare services and outpatient care services were the strongest areas of job creation, helping to offset the loss of 6,000 hospital jobs. The healthcare sector has added an average of 24,000 jobs a month in the last year, the Labor Department said.
One of the worst places to look for work last month was with the federal government, which shed 14,000 jobs. Indeed, the sequester contributed to the loss of 45,000 jobs with the federal government during the last three months. State and local governments cut a combined net total of 3,000 workers in May.
Other areas of weakness included the construction sector, which lost a net of 6,000 jobs. Nonresidential specialty trade contractors took the brunt of the cuts, losing more than 11,000 positions. Nonresidential building shed nearly 5,000 jobs, while employment in heavy and civil engineering construction fell by almost 4,000.
Net employment was little changed in a number of major industries last month, including mining and logging, manufacturing, wholesale trade, transportation and warehousing, and financial activities, the Labor Department said.