U.S. job growth accelerates, unemployment rate drops to 3.8%

U.S. job growth accelerates, unemployment rate drops to 3.8%

U.S. job growth accelerates, unemployment rate drops to 3.8%

High school graduate unemployment hit a 17-year low of 3.9 percent, and black unemployment hit a new record low of 5.9 percent.

Analysts had predicted a more modest 188,000 jobs and an unemployment rate of 3.9 percent, according to Thomson Reuters.

Forecasters had expected 190,000 new jobs in May, but figures for nonfarm payrolls released today showed that 223,000 had been added.

Over the year, unemployment has fallen by 0.5 per cent. Economists had previously said bad weather was to blame for slower job growth over those two months. Inflation is running just below the Fed's 2% target.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell to 62.7 percent last month from 62.8 percent in April. There is growing anecdotal evidence of worker scarcity.

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"It's pretty hard to argue with this jobs report", said Dan North, the chief economist at Euler Hermes North America.

"Overall, the USA economy looks strong", said Paul Ashworth, chief economist at Capital Economics in Toronto. A separate report from the Commerce Department on Friday showed construction spending surging in April.

On Friday morning, markets will get a crucial update on the state of the US labor market with economists forecasting another month of strong job growth.

The survey suggested manufacturers, especially in the food, beverage and tobacco product industries, were starting to run into labor supply issues.

Job gains in May were across all sectors.

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