U.S. nonfarm payrolls rise less than forecast in May; unemployment rate drops slightly more than expected

The U.S. Labor Department announced on Friday that nonfarm payrolls rose by 559,000 in May after a revised 278,000 increase in the prior month (originally a gain of 266,000).

According to the report, notable job gains occurred in leisure and hospitality (+292,000 jobs), in public (+103,000) and private (+41,000) education, and in health care and social assistance (+46,000).

The unemployment rate fell to 5.8 percent in May from 6.1 percent in April. This was the lowest rate since March 2020.

Economists had forecast the nonfarm payrolls to increase by 650,000 and the jobless rate to drop to 5.9 percent.

The labor force participation rate edged down to 61.6 percent in May from 61.7 percent in the previous month, while hourly earnings for private-sector workers advanced 0.5 percent m-o-m (or $0.15) to $30.33, following an unrevised 0.7 percent m-o-m increase in April. Economists had forecast the average hourly earnings to edge up 0.2 percent m-o-m in May. Over the year, the average hourly earnings jumped 2.0 percent in May, following a revised 0.4 percent gain in April (originally an increase of 0.3 percent).

The average workweek was unchanged at 34.9 hours in May, being slightly below economists' forecast for 35.0 hours.