WASHINGTON - Nonfarm payrolls increased 431,000 in May, less than economists estimated, but the strongest monthly gain in more than 10 years, although private payrolls increased by just 41,000, the Labor Department reported today. The unemployment rate fell to 9.7%.
Workers hired for the 2010 Census accounted for more than 95% of the nonfarm payroll gain, bringing the total temporary census staffing to 564,000. May's nonfarm payroll increase was the largest since March 2000.
The manufacturing sector added 29,000 jobs and construction employers shed 35,000. Other sectors showed minimal changes. Private-sector employers added 218,000 workers in April.
Economists polled by Thomson Reuters expected nonfarm payrolls to increase by 503,000 in May and for the unemployment rate to decline to 9.8%, according to the median estimate.
Nonfarm payrolls were unrevised at a 290,000 gain for April and revised lower to a rise 208,000 for March, subtracting 22,000 job gains previously reported.
State and local employment, including education, fell by 22,000 in May.
Census workers tend to include many college students and retirees -- people outside the traditional work force, economists said. Therefore, their employment has a limited economic boost.
"The degree of stimulus, while helpful, is not particularly large," compared with the employment gains created by the federal stimulus package, said Dana Johnson, chief economist at Comerica Inc., before the report.
Average hourly earnings increased 0.2% and the average work week for all employees increased to 34.2. The work week has increased for four consecutive months. The average workweek for production and nonsupervisory employees also increased by 0.1-hour, or 6 minutes, to 33.5 hours.
Economists expected average hourly earnings to increase 0.1% and for the work week to hold steady at 34.1 hours, according to median estimates from Thomson Reuters.
Any inflation stemming from the employment gains will come "ages from now," Johnson said.
"There's an enormous amount of slack in the labor markets," he said. Inflation will stay "awfully low at least into 2011," he said.
