Jobs Report Shows Steady Employment Growth

By Toni Vranjes

June 7, 2013

Employers created 175,000 jobs nationwide in May, and a growing labor force pushed the unemployment rate up.

The employment growth was powered by the service sector, which accounts for about 80 percent of jobs in the country, IHS Chief Economist Nariman Behravesh wrote in a commentary. While the service sector created 178,000 jobs and construction added 7,000 jobs, employment in manufacturing dropped by 8,000, and government employment fell by 3,000.

up_arrow_7_pt_6Unemployment rose from 7.5 percent to 7.6 percent, but the increase happened for a “good” reason, according to Behravesh. More people were searching for jobs, with the labor force expanding by 420,000.

Meanwhile, the “underemployment rate” dropped from 13.9 percent to 13.8 percent. This category includes discouraged people who have stopped looking for jobs, as well as part-timers who would prefer to work full-time.

Job growth has averaged 155,000 over the past three months — which Behravesh described as “decent but not yet spectacular.” The growth has occurred despite the across-the-board government spending cuts that took effect on March 1. The spending cuts likely will lead to slightly slower job growth over the next several months, Behravesh said — but he expects the job market to start picking up steam by the end of the year.

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