U.S. job growth accelerated again in May, defying expectations for a slowdown, even as the unemployment rate rose to the highest level in more than two years.
Employers added 272,000 jobs in May, the Labor Department said in its monthly payroll report released Friday, easily topping the 185,000 gain forecast by LSEG economists. But the unemployment rate unexpectedly inched higher to 4% against expectations that it would hold steady at 3.9%. It marked the highest level for the jobless rate since January 2022.
Wage growth also remained strong last month, with average hourly earnings — a key measure of inflation — rising 0.4%, more than expected. On an annual basis, wages increased 4.1% in May.
"The May jobs report sent conflicting messages," said Bill Adams, chief economist for Comerica Bank. "Payrolls rose solidly and wage growth picked up, signs the labor market is still running hot. On the other hand, the unemployment rate rose, recent job growth has been concentrated in part-time jobs, and temp jobs fell, signs the labor market is cooling."
