U.S. unemployment rate hits a 16-year low
- Author: Zachary Reyes Jun 06, 2017,
Jun 06, 2017, 13:18
According to the Labor Department, the unemployment rate fell to 4.3 percent from 4.4 percent, which is the lowest it has been since 2001.
The past two months of job growth were also lower than originally reported, with March revised down to just 50,000 jobs added and April down to 174,000.
Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs last month and the unemployment rate holding steady at 4.4%.
Wages in May increased 2.5 percent from the year before, in line with the moderate growth they've shown in recent months.
In the future, the healthcare sector is predicted to lose 2.9 million jobs if the GOP bill gets to repeal and replace the Affordable Care Act (ACA). A broad measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they can not find full-time employment, fell two-tenths of a percentage point to 8.4 percent, the lowest since November 2007.
While employers in several industries say it is harder to find workers compared with a few years ago, many are still reluctant to ramp up wages.
Construction payrolls rose 11,000 last month after decreasing by 1,000 jobs in April. Instead, Brainard is anxious by the fact that low unemployment and the seemingly strong labor market haven't stoked higher core inflation (which strips out volatile food and energy prices).
Meanwhile, the National Federation of Independent Business (NFIB) reported higher job creation among its members in May, according to the NFIB Jobs Report released June 1. But it is worth paying close attention to the industry's direction; there are almost 16 million retail jobs in the U.S. Manufacturing, which tends to get far more attention from politicians, employs 12 million people.
For now, most analysts think job growth remains solid enough for the Federal Reserve to feel confident about raising interest rates again when it meets in two weeks.
As the economy continues to expand and reaches a point where almost everybody who wants a job can find one - what economists call full employment - companies should theoretically have to start raising wages to attract new workers. The labor force participation rate in May fell to 62.7%, down from 62.9% in April and 63% in March.
More than 400,000 people stopped looking for work entirely.
Among those unemployed, those who lost jobs or completed temporary jobs declined by 211,000 to 3.3 million.
This wobble might not be serious enough to stop the Fed hiking interest rates this month, but the United States economy certainly doesn't appear as strong as record-high stock markets and other indicators would lead you to believe. As of Friday morning, traders saw a 93.5 percent chance of a rate hike.
The last time USA unemployment dropped below 4 percent was in December 2000.
But losses in the retail sector continued, with payrolls falling by 6,100 over the month.
The report would appear to support the arguments of President Donald Trump and others that the economy is still running too slowly and would benefit from fiscal stimulus in the form of tax cuts.