The U.S. Department of Labor released establishment and household employment estimates for May this morning, which indicated that the country gained 175,000 jobs on a seasonally adjusted basis but that the unemployment rate ticked up slightly from 7.5 to 7.6 percent.
The payroll jobs figure is modestly good news and is consistent with the slow and uneven growth in the economy. As in previous months, the loss of jobs from government austerity continues to be a drag on job growth. The sequestered federal government shed 14,000 jobs in May (on top of 31,000 jobs lost in the previous two months); state governments dropped another 2,000 employees. Job growth in the goods producing sector (manufacturing, construction, and mining) was flat. Over the last year, goods producers have only added 250,000 jobs, while service providers have added nearly 2 million.
There is also some good news in the higher unemployment rate. The number of unemployed people rose by 101,000 on a seasonally adjusted basis, which seems bad until you consider that the increase was due to a surge in the number of people who entered the labor force and were looking for work. The survey data indicate that 420,000 people joined the labor force in May.