May Jobs Report: U.S. Economy Adds 138,000 Jobs, Unemployment Declines

DEVELOPING: The Labor Department said the U.S. economy added 138,000 jobs in May and the unemployment rate declined from 4.4% to 4.3%. The consensus called for 185,000 jobs and economist forecast the unemployment rate to hold steady at 4.4%.

Health care added 24,000 in May, including hospitals adding 7,000 jobs and ambulatory health care services adding 13,000.

Mining added 7,000 jobs in May. Employment in mining has risen by 47,000 since reaching a recent low point in October 2016, with most of the gain in support activities for mining. Construction also added 11,000, as did financial services.

Professional services added a healthy 38,000.

But despite the data from regional factory activity surveys conducted by each district’s Federal Reserve, the Bureau of Labor Statistics (BLS) said manufacturing lost 1,000 jobs in May.

The government report stands in contrast to the ADP National Employment Report released Thursday that showed the U.S. private sector added  added 253,000 jobs in May, far more than the 170,000 median consensus estimate.

“Job growth is rip-roaring,” Mark Zandi, chief economist of Moody’s Analytics said. “The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force. Increasingly, businesses’ number one challenge will be a shortage of labor.”

The Federal Reserve was expected to hike interest rates with all other indicators leading up to the latest report showing strong labor market conditions. That hike is very much in question now.