US employers add 138000 jobs in May

Ashley Carr
June 3, 2017

America is poised to gain jobs for the 80th consecutive month.

Job growth slowed last month, according to this morning's report from the Bureau of Labor Statistics.

Economists surveyed by Bloomberg expected 180,000 job gains.

The unemployment rate slipped to 4.3% from 4.4%, touching the lowest level since 2001. It has dropped four-tenths of a percentage point this year.

Mark Zandi, chief economist at Moody's Analytics, estimates that monthly job growth above 80,000 or so should cause the unemployment rate to fall.

Despite the slowdown in job growth last month, the US economy is running neither too hot nor too cold, with growth holding at a tepid but far from recessionary 2 percent annual rate. As more people start seeking jobs, employers begin to have less incentive to raise pay. The Atlanta Fed is forecasting GDP increasing at a 3.4 percent pace in the second quarter.

But persistently sluggish wage growth could cast a shadow on further monetary policy tightening. Over the past year, average hourly earnings have risen by 63 cents, or 2.5%. Average hourly earning could, however, surprise on the low side because of a calendar quirk.

Total nonfarm payroll employment increased by 138,000 in May, compared with an average monthly gain of 181,000 over the prior 12 months.

Oil trades near $50 as disappointment over Opec agreement eases
Total volume was about 76 percent below the 100-day average due to public holidays in the US and the U.K. West Texas Intermediate (WTI) crude futures were 4 cents higher at $49.84 per barrel.

Wages are up, but not as much as might be expected, he added. That's because employers are struggling to find available workers now that the unemployment rate is near rock-bottom.

Layoffs also are at 40-year lows, which analysts say is because companies fear they may not be able to replace workers they let go.

"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. Retailers and manufacturers shed jobs and leisure and hospitality, a category that includes restaurants, increase at a slower rate. However analysts say the United States stands to gain more by participating in the development of renewable energy.

"Rather, he has pushed for policies that will only hinder economic growth: a disaster of a healthcare plan that will kick millions off their health insurance, a budget that threatens working families, and reckless practices by his administration that only endanger the economic security of every American while he benefits", Heinrich said. "If that proves accurate, wage pressures are likely to build a little more rapidly over the coming years than over the past few".

But payrolls increased by just 138,000.

The president has focused on manufacturing jobs, a sector that has seen steady growth since his election.

Further job gains are likely in construction. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns.

Looking behind the immediate numbers, the picture is mixed at best.

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