The unemployment rate rose 3.7% in May – much higher than the 3.5% estimate – according to a report released by the Labor Department on Friday.
May’s unemployment rate was the highest since last October, CNBC reported.
CNBC on Friday said the increase in the jobless rate is much worse than expected and it means the economy is going into a recession.
The U.S. economy continued to crank out jobs in May, with nonfarm payrolls surging more than expected despite multiple headwinds, the Labor Department reported Friday.
Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth.
The unemployment rate rose to 3.7% in May against the estimate for 3.5%, even though the labor force participation rate was unchanged. The jobless rate was the highest since October 2022, though still near the lowest since 1969.
Average hourly earnings, a key inflation indicator, rose 0.3% for the month, which was in line with expectations. On an annual basis, wages increased 4.3%, which was 0.1 percentage point below the estimate. The average workweek fell by 0.1 hour to 34.3 hours.
“The increase in the unemployment rate is much worse than expected … usually when we rise by a half a point from the lowest unemployment rate, it means the economy is going into recession. We just rose three-tenths in a month.”