US economy added 280,000 jobs in May

06 June 2015

The US labour market improved further in May with employers adding 280,000 jobs, soundly overtaking the estimates of analysts. The unemployment rate, however, inched up to 5.5 per cent from 5.4 per cent, the labor department said yesterday.

The positive development came largely due to improving market absorbing an additional 400,000 Americans into the labour force, which included those working and looking for jobs.

Businesses saw 262,000 job additions, led by solid gains in professional and business services, leisure and hospitality, and health care. Additions by federal, state and local governments numbered 18,000.

However, oil companies continued to lay off workers in response to low crude prices with the mining and logging industry losing 18,000 jobs.

Payroll gains for March and April saw revisions upward by a total 32,000 and March's weak count of 85,000, was revised to 119,000. Also the April estimate was now, down slightly from 223,000.

Wage growth too showed encouraging signs after being sluggish throughout the recovery. Average hourly earnings were up 8 cents to $24.96 and the past year had seen pay increase of 2.3 per cent, against a 2.2 per cent annual rise in April and about 2 per cent since the recession.

According to Robert Kleinhenz, chief economist of the Los Angeles Economic Development Corporation, this was a good report and despite the weak first quarter report, momentum in the economy was holding up, said in a report, which included contribution from Register news service.

In May, a broader measure of unemployment, which included discouraged workers who had given up on prospects on landing a job, also part-timers looking for full-time jobs, remained at 10.8 per cent, a sign that many US citizens had yet to benefit from the recovery.

However, a bright spot was the sharp fall in the proportion of the jobless who had been out of work for over six months. Their number was down to 28.6 per cent from 34.4 per cent a year earlier and had reached 45 per cent at the peak of the recession.

Another positive development was the percentage of part-time workers falling to 18.4 per cent in May, from 18.7 per cent in April. It now approached the long-run average of 18 per cent.

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