Unemployment rate falls to 16-year low, but hiring slows
- Author: Zachary Reyes Jun 09, 2017,
Jun 09, 2017, 17:52
The economy added 138,000 jobs in May and the unemployment rate declined slightly to 4.3 percent, according to the latest data from the Bureau of Labor Statistics. The leading category of job creation in May's total was 38,000 new jobs in bars and restaurants. Job gains have averaged 121,000 over the past three months, compared with an average of 181,000 over the past 12 months.
White House Press Secretary Sean Spicer said the employment report showed "Americans seeking jobs are having more success finding them than at any point in the last 16 years". Average monthly job growth so far this year is now 162,000, compared with 178,000 in 2016. The health care overhaul the administration favors is being reworked in the Senate.
The healthcare industry reported another month of strong job growth in May, outpacing the rest of the economy in hiring.
But the unemployment rate dropped to 4.3 percent in May - its lowest level since May 2001.
Areas of the country with the lowest unemployment rates in April were Ames, Iowa at 1.7 percent and Boulder, Colorado at 1.8 percent. That's because this level of employment means that everyone who wants a job already has one - so employers need to pay more to induce people already working to move into new positions.
While the number of new jobs created in May was below the 180,000 that economists had been expecting, the U.S. has now added jobs for 80 consecutive months.
The jobs numbers likely clear the path for the Federal Reserve to raise interest rates later this month. Decreases in Mangaung (18,000) and in the City of Cape Town (5000) compared to the same period a year ago were observed. Over the past 12 months, job additions have averaged 188,000 per month. This is the highest rate since September 2003, according to StatsSA's Quarterly Labour Force Survey released on Thursday.
The unemployment rate continued to fall and rising wage growth coupled with job gains indicate an economy on the rise, but the sluggish growth in the average hourly earnings (2.5 percent) is cause for concern.
Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labor Department said on Friday.
Construction payrolls rose 11,000 last month after decreasing by 1,000 jobs in April.
"The turnover rate for those jobs is 100 percent in 30 days", she said.
To some economists, these trends suggest that the economy is already well on its way to providing some kind of a job for almost all Americans who are willing and able to work.
Today's report also revised numbers from March and April to reflect less growth. But judging by today's response to the job numbers, traders may be having second thoughts about whether the United States is at full employment, too.
"Firms are adding workers, creating new positions and increasing compensation to attract better applicants and keep their best performers", said NFIB Chief Economist William C. Dunkelberg. The chart below is extremely unnerving, especially during a time when the Federal Reserve, glowing in self-adulation, is raising interest rates and tightening financial conditions. 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.