Unemployment at 16-Year Low in May Jobs Report
- Author: Ronnie Bowen Jun 03, 2017,
Jun 03, 2017, 5:34
March's weak 79,000 got sliced down to 50,000, while the April number declined to 174,000 from 211,000.
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.
"If the participation rate just stabilizes from here for a time, then job growth consistent with a stable unemployment rate is only about 100,000 a month", he said.
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. It has dropped five-tenths of a percentage point this year.
The share of people who are either working or job hunting relative to everyone in their prime working age - the labor-force participation rate - declined to 62.7% from 62.9%.
Mining, quarrying, and oil and gas extraction added 7,000 jobs in May, bringing a total of 47,000 jobs since the October 2016 low. The Fed is scheduled to hold its policy meeting on June 13-14.
Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.
Despite the slowdown in job growth, 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.
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Guided by signals from more hawkish central bank officials, markets priced in an interest-rate increase for this month, just three months after the last one. The data suggest employers are starting to add to payrolls more slowly in a tight labor market.
The Atlanta Fed is forecasting GDP increasing at a 4.0 percent pace in the second quarter.
Ten forecast further monetary policy tightening in September and only six saw a rate hike in December.
Federal Reserve policymakers are watching the jobs data closely, particularly for wage increases. Also, average hourly earnings raised 0.2%, which is also favorable. The unemployment rate fell to 4.3% from the prior month's 4.4% reading. There is growing anecdotal evidence of companies struggling to find qualified workers.
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While this was partly due to people dropping out of the workforce, the Bureau of Labor Statistics' broadest measure of unemployment, which includes workers in part-time jobs looking for full-time employment, dropped to 8.4pc from 8.6pc. The U-6's three-month drop is the biggest since 2014.
America's job market may be losing steam. Employers have added jobs every month since October 2010.
Government employment decreased 9,000 last month.