U.S. employers add 175K jobs, unemployment rate up to 7.6 pct.
Companies went on a mini hiring spree in May, spurring confidence that the economy is strengthening steadily, but not enough to allow the Federal Reserve to begin pulling back its support that has kept interest rates low to spur growth.
Employers added 175,000 jobs in May, and more workers renewed their search to find a job, according to the latest employment report Friday from the Labor Department. The jobless rate edged up to 7.6 percent from 7.5 percent in April — but only because more people were out looking for work.
The slight rise in the jobless rate is “actually a good sign,” said Gus Faucher, senior economist at PNC Financial Services Group. “It's a positive because it means people are more encouraged and looking for work.”
But Faucher said the less-than-robust U.S. jobs report means the Fed will probably continue its aggressive bond buying until the fall to keep interest rates very low.
“This doesn't change the Fed's view on monetary policy,” he said. “So, short-term interest rates will remain at zero for another couple of years.”
The central bank has been buying about $85 billion a month in Treasuries and mortgage-backed securities to increase the money supply and hold down interest rates. That's meant to help the economy by stimulating the housing market and the stock market.
U.S. employers have added an average of 155,000 jobs in the past three months. But the May gain almost exactly matched the 176,000-a-month average over the previous 12 months.
“We're in this holding pattern, continuing to see more of the same,” said Heidi Shierholz, economist at the Economic Policy Institute.
“At this pace, it will take more than six years to get back to the pre-recession unemployment rate,” Shierholz said. Unemployment was 5.0 percent in December 2007, when the Great Recession started.
In the Pittsburgh region, unemployment stood at 7.1 percent in April, according to the latest figures. May data at the metro-market level will be released in about three weeks.
The seven-county jobless rate has been “consistently less than that of the rest of the country throughout the recession,” said Antony Davies, associate professor of economics at Duquesne University.
The labor force grew by 420,000 over April, said the employer survey, and about three-quarters of those people found a job. The labor force is composed of people working or actively looking for a job.
But the labor force participation rate — the share of the working-age people with a job or actively looking for one — remained weak. At 63.4 percent in May, the rate improved slightly from 63.3 percent in March and April, which was the lowest since May 1979 and down from 66 percent when the Great Recession began.
“I don't expect the rate to rise consistently until job opportunities improve meaningfully, and we haven't seen that yet,” Shierholz said.
The 175,000-job gain occurred primarily in the services sector, according to the employer survey.
Professional and business services added 57,000 jobs last month. Retail added 28,000 jobs, and food services and drinking establishments added 38,000.
Manufacturing, however, lost 8,000 jobs in May, the third straight month of declines.
Federal government jobs fell by 14,000. But the decrease was not a sign of the sequester because the government workers are on furlough and still counted among the employed, Faucher said.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at email@example.com.