Payrolls rose by 431,000 last month, including a 411,000 jump in government hiring of temporary workers for the 2010 census, Labor Department figures in Washington showed. Private payrolls rose a less-than-forecast 41,000. The jobless rate fell to 9.7 percent.
Staff reductions at companies such as Hewlett-Packard Co. and Citigroup Inc. indicate a slowing in the labor market that threatens to restrain consumer spending, the biggest part of the economy. Federal Reserve Chairman Ben S. Bernanke said yesterday that unemployment was exacting a heavy toll, showing why economists forecast interest rates will remain low.
Federal hiring of temporary workers to conduct the decennial population count probably peaked last month, economists said.
The unwinding of census employment may keep distorting the payroll figures for months as the government dismisses workers when the count is completed. For that reason, economists say private payrolls, which exclude government jobs, will be a better gauge of the state of the labor market for much of 2010.
The gain in private payrolls followed an increase of 218,000 in April that was revised from 231,000. Excluding all government jobs, employment climbed by 116,000 a month on average in the five years to December 2007, when the recession began.
Manufacturing payrolls increased by 29,000 in May, a fifth straight gain and less than the survey median of a 33,000 increase.
Employment at service-providers increased 427,000 after rising 228,000. Construction companies reduced payrolls by 35,000 after rising 41,000 in March and April combined.
Government payrolls increased by 390,000. State and local governments reduced employment by 22,000, while the federal government added 412,000 jobs.
The number of temporary workers increased 31,000. Payrolls at temporary-help agencies often picks up before companies take on permanent staff.
Average hourly earnings rose to $22.57 in May from $22.50 in the prior month, today’s report showed.
The average work week for all workers rose to 34.2 hours in May from 34.1 hours the prior month.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- decreased to 16.6 percent from 17.1 percent.