- Daniel Acker/Bloomberg
The jobless rate in May dropped to 3.8%, matching April 2000 as the lowest reading since the 1960s. The unemployment rate had been 4.1% for six months before dipping to 3.9% in April, the first sub-4% unemployment rate since late 2000. A historically low unemployment rate and modest wage increases should keep Federal Reserve policy makers in line to raise the central bank’s benchmark interest rate at a meeting later this month.
The U.S. economy added a robust 223,000 jobs in May, bucking many economists’ expectations that hiring should slow in a tightening labor market. May’s payrolls figure is much stronger than the 190,000 jobs economists surveyed by The Wall Street Journal had expected. Employment trended upward in industries including retail, health care and construction. Revised figures show payrolls were upwardly revised a net 15,000 in March
May’s 2.7% year-over-year increase in average hourly earnings remained modest considering a historically low unemployment rate. Wages haven’t increased at better than a 3% rate from a year earlier since the recession ended in 2009. On the month, earnings rose 8 cents in May.
Workforce participation was 62.7% in May, down slightly from the 62.8% rate posted in April and continuing a fairly sideways trend for participation. The labor-force participation rate bottomed out in September 2015, after a 15-year decline, and has stabilized over the last couple of years.
Jobless Rate for High-School Dropouts
In May, the unemployment rate for workers 25 years and older with less than a high-school diploma was 5.4%, down from 6.2% a year earlier. The unemployment rate for those without a high-school diploma touched a 25-year record low late last year, and has held below 6% this year, a sharp drop from 8.5% in September 2016. Meanwhile, the unemployment rate for college grads has been stable at a low level. In May, college grads saw an unemployment rate of 2%.