February 24, 2024

A waiter works at a restaurant in Alexandria, Virginia, on June 3, 2022.

Olivier Douliery | AFP | Getty Images

The U.S. payrolls report for May blew past expectations, supported by strong jobs gains in the professional and business services sector — as well as a jump in government employment.

Professional and business services led job creation for the month with 64,000 new hires, following an increase of similar size in April, the Bureau of Labor Statistics said Friday.

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Government added 56,000 jobs last month, higher than the average monthly gain of 42,000 over the prior 12 months. Employment in government is still below its pre-Covid pandemic level by more than 200,000 jobs.

Job gains were broad-based last month with health care contributing 52,000 and leisure and hospitality adding 48,000. Food services and drinking places led the increase in the latter industry, which had been adding an average of 77,000 jobs per month over the prior 12 months.

Overall, the U.S. economy added 339,000 jobs for the month, much better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth.

The unemployment rate rose to 3.7% in May against the estimate for 3.5%. The jobless rate was the highest since October 2022, though still near the lowest since 1969.

Olu Sonola, head of U.S. regional economics at Fitch Ratings, said the jobs report is a mixed bag.

“The strength of the payroll survey is clearly a big surprise, largely on the back of robust job growth in the healthcare sector and the business and professional services sector,” said Sonola. “However, the 0.3% increase in the unemployment rate is the highest monthly increase since April 2020.”

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