The most recent employment report from the U.S. Bureau of Labor Statistics showed that the economy generated a solid amount of jobs in May - 175,000, actually - but that the unemployment rate still ticked upward by one percentage point.
Although the number of new jobs that were added was roughly the same as April's reading, and the unemployment rate still rose marginally, economists are calling the report as a whole a positive step for the U.S. economy. The reason: more people are entering the workforce.
The report showed that the unemployment rate rose from 7.5 percent to 7.6 percent from April to May, but this came as scores of new job seekers hit the market. This translates to a hiring climate that appears to be picking up, considering hundreds of thousands more people believe they can now find a job. The reading showed that the labor force grew by 420,000 people, in fact, rising to a total of 155.7 million last month.
Several economists were quick to offer their take on the report, knowing that the mixed results could easily cause confusion. Conference Board economist Kathy Bostjancic stated that above all, the report showed the U.S. has easily bounced back from political uncertainty that was once expected to be disastrous.
"With a gain of 175,000 jobs in May, the resilient labor market sustained moderate job gains this spring," she said wrote in an email to NPR. "The [federal] sequester, along with the negative impact from slowing global trade, are being offset by the continued contribution from the revival in the housing market and stronger consumption."
According to the news source, the White House agreed, with Alan Krueger, chairman of the Council of Economic Advisers, stating that although there is always more work to do to improve the figures, "today's employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression."
Contract Staffing Remains Strong
BLS' numbers showed that the professional and business services sector, which includes contract staffing, was leading the way in job creation last month. As a whole, it created 57,000 jobs last month, with 26,000 of those specifically for contract employer positions. This sector has been a major jobs contributor for the past year, during which it added a total of 589,000 jobs. Other job creation leaders included food and beverage companies, which added 38,000 jobs, and the retail industry with 28,000 new jobs.
According to ABC News, the fact that most of the growth was seen in the private sector bodes well for future employment figures. JJ Kinahan, chief derivatives strategist at TDAmeritrade, stated that private sector employment will likely grow in the near future.
"[This is] a very bullish sign especially combined with the fact that the losses were in the government sector," he said. "When we see strong recoveries, this is a pattern that is often seen is that the private sector starts to expand as the economy overall begins to expand."
Still Room to Grow
Although many economists said the entry of more workers into the labor force is a great sign for the economy, others were quick to note that the U.S. still has a long way to go to get unemployment back to December 2007 levels.
"The participation rate is still quite low, even after adjusting for the aging of the U.S. workforce, so we can expect the unemployment rate to stay in this range -- near 7.5 percent -- throughout the rest of the year if employment growth continues at the modest and steady pace of about 175,000 new jobs per month," said Stephen Bronars, senior economist at Welch Consulting.