Economically speaking, it turns out that May was a very good month for the U.S.
More construction jobs and a surge in professional and business services contributed to a huge increase in private payrolls last month that shocked economists, according to a report released Thursday from ADP and Moody’s Analytics.
Up from 174,000 in April, private payrolls increased to 253,000, which “is three times the rate of the growth in the underlying labor force,” according to Mark Zandi, the chief economist at Moody’s Analytics. “So that means the unemployment rate, which is 4.4 percent, is quickly headed to 4 percent. This labor market is rip-roaring and getting really tight.”
New Jobs in May:
- Services created 205,000 new jobs, with professional and business services contributing 88,000 and education and health services adding 54,000.
- Construction added 37,000 new jobs.
- Manufacturing brought 8,000 positions
- Mining jobs increased by 3,000
- Trade, transportation and utilities added 58,000 positions.
- Franchises hired 18,400 new workers.
The only industries to show losses were leisure and hospitality, which went down by 11,000, and information services, which lost 8,000 jobs.
Over the past 12 months, private payroll growth has averaged 211,000.
As the labor market moves towards achieving full employment, some economists doubt that the Trump administration can achieve its goal of 3 percent annual GDP growth, despite a 4.4 percent unemployment rate and the Labor Department reporting hourly wage growth of 2.5 percent in April.
According to ADP, “Medium-sized businesses, with 50 to 499 employees, accounted for the most growth — 113,000 new jobs. Small firms added 83,000 while big business contributed 57,000.”
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