Paul Davidson, USA TODAY
Employers added a better-than-expected 175,000 jobs in May, providing further evidence of a resilient labor market despite huge federal spending cuts and global economic turmoil.
The unemployment rate rose to 7.6% from 7.5%, the Labor Department said Friday, as the labor force, which includes people working and looking forwork, increased by 420,000.
Businesses added 178,000 jobs, while federal, state and local governments cut 3,000. Professional and business services, leisure and hospitality and retail led job gains.
Economists had estimated that 165,000 jobs were added last month, according to a consensus forecast.
Job gains for March and April were revised down by a modest 12,000. March's increase was revised to 142,000 from 138,000, and April's, to 149,000 from 165,000.
Some economists lowered their estimates this week after payroll processor ADP reported businesses added just 135,000 jobs in May and another survey showed service-sector employment stagnating.
Those reports stirred fears that $85 billion in across-the-board federal budget cuts, a January increase in payroll taxes and a eurozone recession were finally nudging a surprisingly solid job market into a fourth straight mid-year slump.
The new health care law's mandate for businesses with at least 50 workers to provide health insurance to many employees starting in January also is expected to dampen hiring.
But other economists have been encouraged by a fairly steady decline in layoffs. The number of initial jobless claims fell by 11,000 to 346,000 in the week ending June 1 and has been trending downward for months - a trend that typically signals healthy job growth.
A recovering housing market, improved household finances and a Federal Reserve initiative to hold down interest rates largely have offset austerity in Washington.