US employers add solid 280,000 jobs; rate at 5.5%
U.S. employers added a robust 280,000 jobs in May, showing that the economy is back on track after starting 2015 in a slump.
The U.S. Labor Department said Friday that the unemployment rate ticked up to 5.5 percent from 5.4 percent in April. But that occurred for a good reason: Hundreds of thousands more people sought jobs in May, and not all found them.
Last month’s strong job growth suggests that employers remained confident enough to keep hiring even after the economy shrank during the first three months of the year. The government also revised up its estimate of job growth in March and April by a combined net 32,000.
Construction and health care companies the drove the May job growth. On the negative side, persistently cheaper oil led energy companies to shed workers for a fifth straight month.
Still, average hourly wages rose only 2.3 percent from a year earlier. Tepid pay gains has been a persistent problem for the economy.
Over the past three months, the economy has added an average of 207,000 jobs, a decent gain though lower than year’s average of 263,667.
Consumers, the main driver of the U.S. economy, remain fairly cautious. Factory orders have dropped. But Friday’s solid jobs report could help confirm the economy’s vitality.
Auto and home sales are accelerating despite otherwise slow-spending consumers. More big employers, such as WalMart, have unveiled pay hikes.
Those factors could power faster growth, fuel job gains and boost wages. If they do, a broader economic recovery than the one that’s existed in the six years since the Great Recession officially ended could emerge.
Over the past 12 months, around 3 million jobs have been added. Those additional paychecks helped increase spending on housing and autos. Sales of newly built homes have surged 23.7 percent through the first four months of 2015 compared with a year ago, government data show. Rising demand for new homes could lead construction firms to ramp up hiring.
Americans bought 1.64 million cars and trucks in May, the most since July 2005. If that trend were to endure, it would benefit a manufacturing sector that’s added a scant 4,000 jobs since January.