From the subject title linked Report above via Heritage
There are, however, two reasons why this large jump in the unemployment rate should not be extremely worrying. First, the unemployment rate increased because a large number of individuals entered the labor force. Actual labor force participation increased to its highest level in over a year. An increase in the participation rate is a good thing for the economy as it increases the number of workers who can contribute to economic growth. Many of these new entrants to the job market could not find work, however, and this increased the unemployment rate.
The other, very unusual aspect is that this monthly report has a large jump in the number of teenagers in the labor market. Teenagers, those ages 16 to 19, make up a very small percentage of the labor force, less than 5 percent. In this month, almost half of the new entrants to the job market were teenagers. Furthermore, the numbers of unemployed teenagers, who have a much higher unemployment rate than workers 20 and older, accounted for about a third of the total increase in unemployment. It appears that the increase in the labor force participation rate and the unemployment rate was affected by the disproportionate number of teenagers in this month's survey.
The other side of the employment report, the payroll survey, reported that the private sector shed 66,000 jobs and government hiring increased by 17,000. Construction and manufacturing continued to be hard-hit, losing 34,000 and 26,000 jobs, respectively. Retail trade (-39,000) was down with large jobs losses in department stores (-14,900) and the transportation sector (-10,500). Professional and business services (-39,000) was sharply down, mostly due to the downturn in accounting (-10,200) and temporary employment (-29,600).
On the positive side, the downturn in the financial services sector appears to be mostly over with only a small decline of 1,000 jobs in May. Education and health services (+54,000) increased hiring the most. Leisure and hospitality (+12,000) also had job growth.
A positive note to this report is that it does not show a great deal of job loss due to layoffs and firings. The increase in unemployment came from new entrants and re-entrants to the labor force, many of whom were the teenagers. A slightly worrying aspect is the reduction in the number of hours worked and the decline of temporary help, both of which can be leading indicators for future employment reports.
Add to that the impending raise in minimum wage. Something has to give somewhere and it will be in the jobs market. Count on it.