Employers in the U.S. took on 175,000 more workers in the U.S. during May, which was more than had been expected. This showed that the largest economy in the world is weathering the impact of budget cuts and higher taxes.
The Labor Department Jobs report surpassed the median projection of 163,000 made by economists. The rate of unemployment however increased from 7.5% to 7.6% as more people came back into the labor force.
The latest jobs report is a new sign companies have become optimistic over the prospects for second half of the year demand following a curb on consumer spending power that was caused by the increase in payroll tax at the start of 2013.
Speculation is taking place that there is still not enough strength in the country’s job market to prompt a pulling back by the Federal Reserve Bank on its monetary stimulus program. This helped to push up both European and U.S. stocks.
Economists said the unemployment rate increased for the right reason as more people are returning to the work force or are entering for the first time and the jobs market was able to absorb the majority of them.
Gains in employment were across the board with industries from construction and retailing to health service and education adding new payrolls. Payrolls however were cut for manufacturers for the third consecutive month.
Private employers added 179,000 jobs for the month, including 27,700 new employees in retail and 7,000 new ones in construction.
The underemployment rate, which has those people working part time who would like full time work as well as people who want work but no longer look, fell to 13.8%.