The U.S. added 223,000 jobs in May and the unemployment rate dropped to 3.8 percent, according to Labor Department figures published on Friday.
Economists forecasted 190,000 additional nonfarm payrolls, with the unemployment rate holding steady at 3.9 percent.
Manufacturing performed strongly, adding 18,000 jobs. Construction grew by 25,000 new positions. The Mining sector expanded by 6,000. Service providers added 171,000 jobs, with an increase in retail of 31,100.
Average hourly earnings for workers on private nonfarm payrolls climbed by 8 cents to $26.92.
White unemployment is 3.5 percent, while Hispanic unemployment is 4.9 percent. Black unemployment is 5.9 percent — a new record low down from 6.6 percent the previous month — while Asian unemployment came in at 2.9 percent.
“Average hourly earnings increased 2.7 percent from a year earlier, more than projected, while the jobless rate fell to 3.8 percent from 3.9 percent to match April 2000 as the lowest since 1969,” Bloomberg reports.
The solid hiring data coincides with other evidence that the economy is on firm footing after a brief slowdown in the first three months of the year. The economy grew at a modest 2.2 percent annual rate in the January-March quarter, after three quarters that had averaged roughly 3 percent annually.
Companies are spending more on industrial machinery, computers and software — signs that they’re optimistic enough about future growth to expand their capacity. A measure of business investment rose in the first quarter by the most in 3½ years. That investment growth has been spurred partly by higher oil prices, which have encouraged the construction of more drilling rigs.
Manufacturers have benefited from the healthier business spending and have increased hiring. In April, factories expanded production of turbines and other heavy machinery by the most in seven months.
Macroeconomic Advisers, a forecasting firm, says it now foresees the economy expanding at a robust 4 percent annual pace in the April-June quarter, which would be the fastest in nearly four years. That is up from its forecast last week of less than a 3 percent rate for the current quarter.
The Associated Press contributed to this report.