The U.S. economy added 175,000 jobs in May, a steady pace that shows strength in the face of tax increases and government spending cuts if not enough to reduce still-high unemployment.
Our government may be stalking us, but at least we still have jobs. A new report from the Labor Department out Friday shows the U.S. added 175,000 jobs in May and the unemployment rate rose from 7.5 percent in April to 7.6 percent, which apparently is actually a good thing because it means people are looking for work. The report shows that job growth has remained steady over the past three months, with employers adding an average of 155,000 jobs, but still not as high as the surge -- an average of 237,000 jobs added -- that occurred between November 2012 and February 2013.
Investors seemed pleased that the report hit a sweet spot: The job growth showed the U.S. economy's sturdiness. Yet the gain was modest enough that many analysts think the Federal Reserve will continue making bond purchases intended to stimulate growth for at least several more months. The purchases have eased long-term loan rates and lifted stock prices.
The Dow Jones industrial average surged more than 200 points.
"Job growth is still a bit weaker than desired," said Russell Price, an economist at Ameriprise Financial. But the steadiness of the job gains "is a testament to the economy's much improved underlying fundamentals."
The housing market is strengthening, auto sales are up and consumer confidence has reached a five-year peak. Stock prices are near record highs, and the budget deficit has shrunk.
The American economy's relative strength contrasts with Europe, which is gripped by recession, and Asia, where once-explosive economies are now struggling.
There are signs in the report that suggest that the federal government's spending cuts in domestic and defense programs and scant growth in other nations are weighing on the U.S. job market. Overseas weakness has slowed down demand for U.S. exports.
Manufacturers cut 8,000 jobs. The federal government cut 14,000. Both were the third straight month of cuts for those industries with a total of 45,000 jobs cut in the federal government.
Temporary jobs rose by about 26,000. The economy has added temporary jobs for eight straight months, which suggests that employers are responding to increased demands, but lack confidence enough to hire permanent workers.
Retailers and restaurants added a combined total of 66,000 new employees into lower paying jobs, leaving jobs that pay higher wages like manufacturing, construction and finance yet to recover.