Blow to Donald Trump as US jobs growth slows down
- Author: Zachary Reyes Jun 02, 2017,
Jun 02, 2017, 19:59
Nonfarm payrolls increased by 138,000, well below the 185,000 figure pencilled in by economists, while numbers for March and April were revised down by a total 66,000.
The department's latest employment report suggests that eight years after the Great Recession, job growth is slowing after an extended period of gains.
The unemployment rate is forecast to be unchanged at a 10-year low of 4.4%. However, in the past year the jobless rate has dropped from 4.7 percent to 4.3 percent even as the labor force has grown more than 1.7 million.
The household survey (which is used to calculate the unemployment rate) was also poor, showing a 233,000 loss of jobs.
The closely watched employment report was released less than two weeks before the Fed's June 13-14 policy meeting. Private payrolls rose by 174,000 jobs in April.
But most agreed that a hike would "soon be appropriate". The Atlanta Fed is forecasting gross domestic product increasing at a 4.0 per cent pace in the second quarter.
But persistently sluggish wage growth could cast a shadow on further monetary policy tightening.
At 9:52 a.m. ET the Dow Jones Industrial Average .DJI was up 21.5 points, or 0.1 percent, at 21,030.15, the S&P 500 .SPX was up 6.16 points, or 0.25 percent, at 2,417.96 and the Nasdaq Composite .IXIC was up 26.51 points, or 0.43 percent, at 6,225.03. The index hit a 2-1/2-year high of 57.7 in February amid optimism over President Donald Trump's pro-business policy proposals.
The tepid average hourly earnings reading comes as annual inflation rates have retreated in recent months. Job growth is slowing as the labor market nears full employment.
There is growing anecdotal evidence of companies struggling to find qualified workers.
He said: "Today's job number probably won't stop the Fed from raising rates".
There are, however, fears that political scandals could derail the Trump administration's economic agenda.
The nation's labor force participation rate - the percentage of the 16-and-older civilian non-institutionalized population that is either employed or actively seeking work - dropped two-tenths of a point to 62.7 percent in May. It has rebounded from a multi-decade low of 62.4 percent in September 2015 and economists see limited room for further gains as the pool of discouraged workers shrinks.