Hiring surged last month as U.S. employers added 339,000 jobs, far above expectations, according to a report from the Labor Department on Friday.

The job gains for March and April were also stronger than previously reported. The April jobs figure was revised up by 41,000, while the March number was revised up by 52,000.

The strong jobs numbers indicate the U.S. jobs engine continues to chug along, with substantial hiring in business services, health care and hospitality.

Construction companies added 25,000 jobs last month even as high interest rates have weighed on the housing market.

The unemployment rate, which is compiled from a separate survey, paints a less rosy picture.

Unemployment, which been at a half century low, inched up in May to 3.7%. Meanwhile, the jobless rate among African Americans rose to 5.6%, after falling to a record low in April.

The stronger-than-expected job gains in May extend the labor market's red-hot streak and that's bound to reinforce concerns about inflation.

While a tight job market is good for workers, it can put upward pressure on prices, making it harder for the Federal Reserve to restore price stability. Average wages in May were 4.3% higher than a year ago.

The jobs report is one of several factors the Fed will need to consider as it decides whether to continue raising interest rates when policymakers meet later this month.

Copyright 2023 NPR. To see more, visit https://www.npr.org.



The weather is getting warmer, and the summer job market is heating up as well. The Labor Department said this morning that employers added a whopping 339,000 jobs in May. Job gains for March and April were also revised upwards. Many employers are still hiring, but they're not as desperate for workers as they were at this time last year. NPR's Scott Horsley is here with details.

Good morning, Scott.


FADEL: OK. So employers added more than 4 million jobs over the last 12 months. How long can they keep this up?

HORSLEY: Evidently a little bit longer. You know, forecasters have been projecting a slowdown in job growth month after month, and it just hasn't happened. We continue to see solid hiring in business services, health care, hospitality. A lot of amusement parks are looking forward to a busy summer season. I spoke this week with Leah Koch-Blumhardt, whose family owns the Holiday World Splashin' Safari Parks in Santa Claus, Ind. They had one of their best Mays on record, capped off by the Memorial Day weekend last week. And unlike last year, when they were really struggling to find enough workers to staff the parks, Koch-Blumhardt says this year they're in pretty good shape.

LEAH KOCH-BLUMHARDT: We're still hiring, and we still have turnover throughout the summer. But getting employees this year to run the rides and the slides and lifeguard has been a lot easier this year. We're firing on all cylinders, and it's shaping up to be a really great season.

HORSLEY: Koch-Blumhardt says she and her family members still have to pitch in occasionally making pizzas or dusting funnel cakes when the front-line workers are shorthanded, but she thinks they're going to have to do less of that this year than they did last.

FADEL: What's made hiring easier this year?

HORSLEY: Well, one change is that there are more international workers available on temporary visas. That's a workforce that was largely absent during the depths of the pandemic, but it has bounced back. And that's really part of a larger story in the job market, which is the rebound of immigration. Foreign-born workers accounted for more than half the growth in the U.S. labor force last year. And without all those extra hands, there's no way the economy could have enjoyed this kind of strong job growth. Koch-Blumhardt says they've also attracted more local applicants using the tried-and-true approach of higher wages.

KOCH-BLUMHARDT: This year, we took our 16-, 17-year-old pay up to match the 18-year-old pay. So before, they were making $10 an hour, and now they're making $13 an hour. That makes it a very competitive rate for a 16- or 17-year-old in this area.

HORSLEY: And Holiday World also just added a new dormitory that can house more than a hundred of their workers. That's a big plus in an area that didn't offer a lot of short-term rental housing, and it's making it easier to recruit seasonal workers from outside the immediate area.

FADEL: OK, strong job gains. But the unemployment rate went up last month. Why is that?

HORSLEY: Yeah. The jobs number comes from a survey of businesses, and the unemployment rate comes from a separate survey of households. And it paints a somewhat less rosy picture of the job market right now.


HORSLEY: The unemployment rate ticked up last month from 3.4% to 3.7%. Still low by historical standards, but this suggests people aren't feeling quite as optimistic about the job market as they had been. Julia Pollak, who's chief economist at the job search website ZipRecruiter, notes that you're not seeing as many people quit their jobs, and that may be because they see, you know, better-paying opportunities as not quite as plentiful as they used to.

JULIA POLLAK: Workers are clearly aware that the ground has shifted under their feet and that they no longer have quite the bargaining power that they did when workers were so scarce.

HORSLEY: The unemployment rate for African Americans, which had fallen to a record low in April, ticked up again last month. It's now at 5.6%, and the unemployment rate for teenagers also rose last month to 10.3%. So some mixed signals, and that's something the Federal Reserve will have to consider as they try to decide what to do with interest rates later this month.

FADEL: NPR's Scott Horsley. thanks.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

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