Job growth jumped in May, reaffirming the labor market’s vigor despite a swirl of economic headwinds.
U.S. employers added 339,000 jobs on a seasonally adjusted basis, the Labor Department said on Friday, an increase from a revised total of 294,000 in April.
The strong figures emerged from a survey of employers. A separate component of the report, based on a survey of households, yielded a somewhat dissonant picture.
That data showed a rise in the unemployment rate to 3.7 percent, from 3.4 percent, and a decrease of 310,000 in the number of people employed, as participation in the labor force was little changed.
In a sign that the pressure to entice workers with pay increases is easing, wage growth slowed slightly in May, with average hourly earnings increasing 0.3 percent from April, and 4.3 percent over the year.
“We’re still seeing a labor market that’s gradually cooling, but it’s at a glacial place,” said Sarah House, an economist at Wells Fargo.
Still, the hiring numbers suggest that employers across the spectrum remain eager for workers even in the face of high interest rates and economic uncertainty. Many are still bringing on employees to meet steady consumer demand, especially for services.
Rather than lay off workers — which would signal deeper cracks in the labor market — a large swath of companies have also been content to limit their head count through attrition.
An open question is whether employers can continue to rebuff economic challenges — and for how long.
“While overall the jobs market performance has been surprisingly strong, I think the labor market can’t defy the gravity of Fed rate hikes forever,” Ms. House said.
The report complicates the picture for the Federal Reserve, which has been raising interest rates for more than a year to temper the labor market and rein in price increases. Fed officials have indicated that the jobs report will be an important factor as they decide whether to raise interest rates again. Their next meeting is June 13 and 14.
Looming over the report is the debt ceiling deal, which the Senate passed on Thursday, though economists largely expect the spending caps and cuts to have only marginal impact on the labor market going forward.
