The unemployment rate increased to 3.7 percent in May as the economy added 339,000 jobs, according to the U.S. Bureau of Labor Statistics.
The rise in the unemployment rate from the 53-year low of 3.4 percent in April indicated that the Federal Reserve could pause interest rates this month after increasing rates 500 basis points since the start of 2022.
Job growth was higher than expected last month, topping the 190,000 estimate from Dow Jones. Government employment increased by 56,000, higher than its monthly average gains of 42,000 over the past year. The health care sector added 52,000 jobs, while leisure and hospitality added 48,000 jobs, mainly in food services and drinking establishments. Construction added 25,000 jobs, including 11,000 in heavy and civil engineering construction. The transportation and warehousing sector added 24,000 jobs in May.
The number of people who lost jobs and who completed temporary jobs increased by 318,000 to 3 million, offsetting a decrease in the previous month. The labor force participation rate was 62.6 percent. The number of long-term unemployed remained at 1.2 million and accounted for nearly 20 percent of the total unemployed.
Average hourly earnings showed signs of easing after increasing 4.3 percent over the last 12 months, rising 0.3 percent following a 0.4 percent rise in April.
U.S. Assistant Secretary of Labor for Public Affairs Julie McClain Downey said the unemployment rate “remains within a low, narrow range that has remained consistent for more than a year, the longest period of sub-4 percent unemployment since the 1960s.
“This is a strong and healthy report that squarely places the economy in a resilient period of steady growth, where jobs in 10 large sectors of the economy are above their pre-pandemic level,” Downey said.