The U.S. employment sector saw a growth of 280,000 new jobs in May, a figure that represent the best tally in 2015.
The governmental report that U.S. jobs growth picked up a pace in May is slowly dissipating the fears of a disappointing Q2. While the job market is still catching up at a slower pace relative to last year’s numbers, it is still expected that the Fed will be increasing rates in 2015, albeit at a later time than initially stated, with September being the current option for the hike.
In April, the employment sector saw an addition of 221,000 jobs, a number that was readjusted after the initial announcement of 223,000 jobs.
The Labour Department released reports that indicated the highest job additions have been in the professional as well as business services. Closely following were the leisure and hospitality sectors. Healthcare also ramped up the employment growth.
Against this background, the unemployment rate ticked to 5.5 percent in May, contrary to analysts’ estimations that placed the unemployment rate at 5.4 percent, while placing the job growth at 225,000 new additions.
Wages are also reported to have increased in May. The average wage per hour in the private sector increased by 8 cents, representative for 0.3 percent. Overall earnings per hour rose with 2.3 percent.
It is possible that the May report will be adjusted after more data is gathered. For now, the estimates indicate good news as to the will of employers to continue their investment in new jobs.
While the May report spiked hopes of the constant recovery, the International Monetary Fund readjusted the economic forecast for the U.S. with a slash from 3.1 percent to 2.5 percent in economic growth.
At the same time, the IMF called upon the Fed to not raise interest rates before 2016. The response was that until a constant trend is observed toward inflation going back to 2 percent, interest rates will not be raised. Despite this statement, it is expected that the Fed will only hold off until September the latest.
Regarding the labor market, issues still persist in the part-time job sector, as well as in the segment of the U.S. population that feels discouraged to keep looking for a job.
A report released by the Commerce Department last week revealed that the decrease in gross domestic product by 0.7 percent from January to March was strongly connected to severe winter conditions, disturbed activity at the West Coast shipping ports, as well as a stronger dollar.
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