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Transcript

ARI SHAPIRO, HOST:

The number of Americans with paychecks increased by 280,000 in May. That's according to the Labor Department's monthly employment situation report out this morning. The pickup in hiring brought more people back into the workforce, and that pushed the unemployment rate up a notch to 5.5 percent. NPR's Yuki Noguchi has more.

YUKI NOGUCHI, BYLINE: Employment was more robust last month than most people expected by nearly every measure. Not only were more people working, they also earned slightly more. Many of the new jobs were in higher-paying sectors such as health care, construction and professional and business services. A large number of workers were only able to find part-time work. On the other hand, there were also fewer discouraged workers as more people started working or looking for work during the month. When more people start searching for jobs, it can have the effect of pushing the jobless rate up. But PNC financial chief economist Stuart Hoffman says in this case, that's a sign of greater optimism.

STUART HOFFMAN: People came back to the workforce. They sensed that things were better. Most of them found jobs.

NOGUCHI: The report shows the economy has come back from a very sluggish winter. It actually contracted in the first quarter, held down by bad weather, a labor dispute at ports and a strong dollar, which is dampening demand for U.S. goods and services. The question is whether the May numbers prove definitively that the drags on the economy and the job market are now behind us. PNC's Hoffman says he thinks it does.

HOFFMAN: Now we've had two strong numbers in a row, April and May. I think that tells you the first quarter was a big fluke.

NOGUCHI: Mark Hamrick is bureau chief for bankrate.com. He says some of the challenges still linger. The dollar remains strong against other currencies, which will continue hurting U.S. manufacturers that export. And low oil prices are continuing to affect employment in those industries.

MARK HAMRICK: Fifteen-thousand jobs were lost there in April. Seventeen-thousand jobs were lost in May. And this tells us that the decline in oil prices, which was so dramatic last year, is continuing to have an impact on employment.

NOGUCHI: Hiring has been a key indicator for the Federal Reserve, which has said it's likely to raise interest rates later this year. But so far, the May report does not seem to have quieted debate about when the central bank is likely to make its move. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

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