Unemployment ticks up to 7.6%, 175,000 jobs added
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The Bureau of Labor Statistics reports the economy added 175,000 jobs in May, just edging out analyst expectations. The unemployment rate ticked up to 7.6 percent from 7.5 percent the previous month, likely owing to an increase in the labor force participation rate.
Though the nation added jobs, economists worry about the type of job fields that grew last month.
“There is a quality issue here,” says Julia Coronado, chief economist with BNP Paribas. “We are just creating a whole lot of restaurant jobs — 43,000 jobs were created in the leisure and hospitality industry.” Coronado says many of these types of jobs do not pay benefits.
Moreover, temporary jobs are on the rise. Some attribute this trend to uncertainty over health care reform.
“Maybe employers are more reluctant to add permanent workers and lean more on the temporary workforce to get the job done,” Coronado says.
The federal government lost 14,000 jobs in May, after losing 31,000 in the April and March.
“The sequester really is taking its toll,” says Coronado.
Audio Extra: Chris Low, chief economist with FTN Financial, explains what the latest jobs data means to the Federal Reserve.