At the same time, the unemployment rate increased to 5.5% from 5.4%, which had hit a seven year low last month. While an increase in the unemployment rate seems counterintuitive with the increase in the number of jobs for the month, there seems to be a pretty straightforward explanation. Economists believe with more jobs available and the end of the winter season cold, more people in the US are once again looking for work, increasing the number of people actively looking for employment.
This is especially good news since the job growth numbers for the first quarter of the year had been lower than predicted. Job numbers for January, February and March had been lower than had been anticipated, which had economists questioning whether or not the economy was recovering. The latest numbers give economists hope they were an aberration due to harsh winter weather, rather than a trend and something to worry about long-term.
The numbers are good for both employers and employees. They show businesses are in need of labor, and this is leading to a slight increase in the wages employees are earning. Economists are predicting the job market will remain strong with good job growth numbers through the end of 2015.
There are some numbers hidden in the good news that may make some economists pause. A broader unemployment definition which includes part-time workers looking for full-time employment, and the long-time unemployed people who would like to work, but have given up finding a job has not shown signs of improvement. That rate remained steady at 10.8 percent, something economists would have liked to seen drop with the improving economy.
With a sense of relief with the May numbers, the next date economists will be eyeing is June 17. This is when Federal Reserve Chair Janet Yellen will give her thoughts to the press on where she feels interest rates should be.With interest having been near zero for a long period of time in hopes of stimulating the economy, the new numbers may help her decide it’s time to raise them a bit. If she does, it will be a sign that the Federal Reserve is confident the US economy is in a strong position and it has moved on from the Great Recession.
(Photo courtesy of MITD Gallery)