US job growth picks up in May; unemployment rate falls to 5.8%

Nonfarm payrolls increased by 559,000 jobs last month; new orders for US-made goods fell more than expected in April

WASHINGTON

US employers boosted hiring in May as the easing pandemic, helped by vaccinations, pulled more people back into the labour force, offering assurance that the economy’s recovery from the COVID-19 recession remained on track.

Nonfarm payrolls increased by 559,000 jobs last month, the labour Department said in its closely watched employment report on Friday. Data for April was revised slightly higher to show payrolls rising by 278,000 jobs instead of 266,000 as previously reported.

Economists polled by Reuters had forecast 650,000 jobs created in May. The unemployment rate fell to 5.8% from 6.1% in April. The jobless rate has been understated by people misclassifying themselves as being “employed but absent from work.”

April’s initial employment count, which delivered roughly a quarter of the new jobs economists had forecast, led to handwringing among some economists and investors that growth was stagnating at a time when inflation was rising.

The improving public health situation and massive fiscal stimulus are supporting the economy. At least half of the American population has been fully vaccinated against COVID-19, according to data from the US Centers for Disease Control and Prevention.