The strength of the U.S. labor market has flummoxed professional economic forecasters for nearly two years.
The Labor Department said Friday that the U.S. economy added 339,000 workers to payrolls in May, far more than the 190,000 Wall Street had predicted.
Even more embarrassing, Wall Street did not just get the number wrong. It got the direction wrong. Forecasters thought the labor market would weaken in May, instead hiring picked up.
This is the 14th consecutive month in which the jobs reports has come in above the forecast. It is the 20th month out of the last 21 months in which the labor market has beat expectations, making this one of the longest losing streaks for forecasters.
The range of forecasts among analysts polled by Econoday did not even come close to the actual figure. Analyst forecasts ranged from 100,000 to 260,000. So the most bullish prediction was 79,000 jobs short.
The unemployment rate came in worse than expected, rising to 3.7 percent. Forecasters had predicted a rise to 3.5 percent from 3.4 percent last month. The range was tight, between 3.4 percent and 3.5 percent.
Forecasts were for private payrolls to rise by 165,000. The range of predictions began at 155,000 and topped out at 200,000. The Labor Department reported 283,000.
Economists were also confused this month by the fact that the economy added so many more jobs yet unemployment still increased.