Jobs growth in U.S. slows in May
- Author: Zachary Reyes Jun 03, 2017,
Jun 03, 2017, 18:49
Economists had expected a gain of about 185,000 new jobs in May, but a report from the Bureau of Labor Statistics published on Friday showed that the USA economy only added 138,000 jobs. Today's report revised down the estimates for new jobs in March and April, by 66,000 altogether.
After a robust start to the year, job creation has cooled, averaging 121,000 over the past three months.
The broader hiring slowdown is in line with forecasts from many analysts, who have penciled in a downshift as the economy rounds out eight years of expansion this month and slack in the labor market gets further absorbed.
The White House has hailed the rosier jobs reports in recent months and President Donald Trump has vowed to add 25 million new jobs to the economy over a decade. The unemployment rate fell to a 16-year low at 4.3%, likely due to less participation in the labor market.
The survey of households from which the unemployment rate is derived also showed a drop in employment.
An alternative measure of unemployment and underemployment, which includes those who have stopped looking and those in part-time jobs who want full-time positions, was 8.4% in May, versus 8.6% the prior month.
The new numbers come a day after Trump announced the USA was exiting the Paris agreement on climate change, a decision many in the business community opposed. USA stocks closed at new highs.
The modest payrolls increase could raise concerns the economy was struggling to gain speed after growth slowed in the first quarter.
The U.S. central bank raised interest rates by 25 basis points in March.
When the unemployment rate was 4.4 percent in May 2007, wages for nonmanagerial workers were growing better than 4 percent annually. During the past year average hourly earnings have risen by 63 cents, or 2.5 percent.
"Wage growth over the past year has averaged 2.5 percent - above inflation but weaker than many expected at this stage in the recovery", Holzer said.
But with the labor market expected to hit full employment this year, there is optimism that wage growth will accelerate.
Critics, however, say pulling out of the Paris Climate Accord could backfire on the administration in terms of creating jobs.
Energy jobs were particularly in focus Friday following President Trump's decision to withdraw from the Paris climate agreement.
Stay on topic - This helps keep the thread focused on the discussion at hand. The labor force shrank by more than 400,000 people in May as baby boomers retired and fewer Americans looked for work. However, real wages - the value of workers' pay with inflation taken into account, decreased 0.4 percent in the same time frame.
But governments, manufacturers and retailers lost workers.
On balance, what this month's report shows is the latter situation. Labor force participation was at 62.7%, representing a 0.2 percentage point decline.