United States unemployment rate hits a 16-year low
- Author: Zachary Reyes Jun 06, 2017,
Jun 06, 2017, 3:09
The national unemployment rate nudged lower, to 4.3 percent from 4.4 percent - a level that was already the lowest in 10 years when it was announced last month.
The measure of that, the labor force participation rate, fell 0.2 percentage points to 62.7 percent.
Average hourly earnings increased by 4 cents to $26.22. As recently as 2015, job growth averaged 226,000 a month.
USA job growth likely remained strong in May, a further sign of an acceleration in economic activity that would effectively seal the case for an interest rate increase this month despite sluggish wage gains.
Minutes from the Fed's May 2-3 meeting that were released last week showed that some central bankers were concerned that progress toward the Fed's inflation target had slowed. Though some leading macroeconomic indicators are not confirming the generally positive tenor, and we are growing increasingly concerned about the longer-term implications of certain policies being pursued by the new executive administration, equity markets closed today at record levels, leading us to conclude that a recession is not forthcoming in 2017.
And that will cause a major dilemma for the Federal Reserve and anyone else who was hoping that the economy was finally - after almost a decade of the ho-hums - turning a corner. 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.
The job number and the unemployment rate are calculated using two separate federal surveys, which sometimes leads to divergent results. Most other sectors, including manufacturing, wholesale trade, retail trade, and transportation and warehousing, saw little change, the BLS said.
Hiring in the months of April and March were revised downward by a combined 66,000.
Despite the weaker than expected job growth, the unemployment rate edged down to 4.3 percent in May from 4.4 percent in April. The employment to population ratio also fell in May to 60% from 60.2% in April.
Even with the figures, economic growth is likely to rebound this quarter and the U.S.is near full employment, helping explain why Federal Reserve policy makers are expected to raise interest rates when they meet June 13-14. And in what may be even better news, the U-6 unemployment rate dropped from 8.6% to 8.4%, continuing its steady decline.
The May report from the U.S. Bureau of Labor Statistics has something for everyone: Good indicators, bad indicators, and a near-historic low in overall unemployment. If that continues, then we're unlikely to see significant jobs growth for the entire year, and that will create problems all it's own.
USA financial markets have nearly priced in a 25 basis points increase in the Fed's benchmark overnight interest rate this month, according to CME FedWatch. Nonmanagement wages rose just 2.4 percent last month from a year earlier.
The bigger picture is that the jobless rate has fallen by 0.5 percent since the start of the year, with many employers having difficulty finding qualified workers.
However, there are fears that few political scandals could derail the economic agenda of Trump administration.
But, for argument's sake, let's say it might have taken a million jobs instead of just 810,000 before seasonal adjusting (including the 230,000 Birth/Death guesstimate) for the computers to spit out the 185,000 figure that the experts were expecting.