The US economy added 559,000 jobs in May and the unemployment rate dropped to 5.8 per cent, the Labour Department said on Friday, as Covid-19 vaccines helped businesses reopen and rehire.
While last month's employment gains were weaker than the consensus estimate, the monthly report contained evidence the economy was recovering from the mass layoffs caused by the pandemic, with the number of long-term unemployed declining 431,000 to a still-high 3.8 million.
President Joe Biden called the surge in new US jobs "great news" and said the country was leading the world in recovering from the pandemic.
"This is progress, historic progress" after "our worst crisis in 100 years," Mr Biden said on Friday.
"No other major economy in the world is going as fast."
However, the economy is still short 7.6 million jobs compared to February 2020, before the pandemic struck, the report said.
Sectors that were badly damaged by pandemic restrictions made up the bulk of the employment gains last month, with the leisure and hospitality sector adding 292,000 jobs, two thirds of which were in businesses like bars and restaurants.
Accommodation added 35,000 jobs, and amusement, gambling and recreation businesses added 58,000, but the leisure and hospitality sector is still short 2.5 million positions compared to February 2020, the report said.
Average hourly wages increased strongly, rising 15 cents to $30.33 after a 21-cent gain in April, which the Labour Department attributed to firms trying to attract unemployed workers.
"The data for the last two months suggest that the rising demand for labour associated with the recovery from the pandemic may have put upward pressure on wages," the report said, noting that the pandemic's employment disruptions "complicate the analysis" of wage trends.
The Labour Department also revised the gains for previous months slightly upward, with March hiring reported at 785,000 and April revised to 278,000, a net increase of 27,000 for the two months.
