US Employers Add Modest 138K Jobs; Unemployment at 4.3 Percent
- Author: Zachary Reyes Jun 04, 2017,
Jun 04, 2017, 4:41
Restaurants and health care companies posted solid gains.
"Even though job growth slowed, it's still well above where it needs to be to keep up with the working-age population growth", said Jed Kolko, chief economist at Indeed, an online recruiting site. The Fed raised rates twice over the past six months. "Perhaps more in question is the signal coming out of that meeting regarding subsequent hikes". With these revisions, temporary help employment growth was 1,900 less than previously reported. "With the unemployment rate dropping to 4.3 percent, it really can't get much better", said Brian Kropp, human resources practice leader at the consulting firm CEB, now part of Gartner. The sector posted its seventh straight month of employment increases.
Average hourly earnings, a closely-watched metric, rose 0.2% during the month, as expected, putting year-over-year wage gains at 2.5%.
"It's definitely becoming an increasing problem for businesses - finding qualified workers", said Stephen Stanley, chief economist at Amherst Pierpont Securities.
There are, however, fears that political scandals could derail the Trump administration's economic agenda.
Hiring slowed substantially in May as employers added 138,000 jobs but the disappointing showing likely won't stop the Federal Reserve from raising interest rates this month. "The probability that any of the Trump stimulus would become reality has decreased significantly in recent weeks".
The U.S. central bank raised interest rates by 25 basis points in March.
Persistently sluggish wage growth could cast a shadow on further monetary policy tightening.
That left the year-on-year increase in wages at 2.5 percent.
German automakers Daimler, BMW and Volkswagen are climbing after unveiling their monthly USA auto sales figures. USA stock index futures trimmed gains. If that trend continued in May, a falling U-6 would point to a strengthening economy despite weak growth during the first three months of the year.
Among the major worker groups, the unemployment rate for Whites edged down to 3.7 percent in May. Wage growth has been basically flat since the recession despite the economy continuing to add jobs.
Jim O'Sullivan of High Frequency Economics was among those who said the weakness in job creation last month likely was due to volatility and distortions from seasonal adjustments applied to the data.
But the gains were enough to push the unemployment rate down to 4.3 percent - the lowest level since 2001.
The president has focused on manufacturing jobs, a sector that has seen steady growth since his election. Department store operators like J.C. Penney Co Inc (JCP.N), Macy's Inc (M.N) and Abercrombie & Fitch (ANF.N) are struggling against stiff competition from online retailers led by Amazon (AMZN.O). Hiring for the last couple months have shifted to a lower gear. Earlier this month, she said she isn't convinced the Fed has met its goals of achieving full employment and stable inflation.
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