U.S. Labor Market Slowing Down, Only Adding 75000 Jobs in May

May jobs report: Hiring slowed down in May, just 75,000 jobs added

Although it's hard - even for an economist like me who studies economic policy - to interpret the data reported in any one jobs report as the beginning of a trend, the latest numbers do suggest the Federal Reserve may have to lower its benchmark interest rate to shore up the economy. But the number was also above the 27,000 jobs estimated by the ADP National Employment Report.

Then last week, Trump opened up a new trade war front against another major U.S. trading partner - Mexico - warning that he will impose five-percent tariffs on all Mexican goods on Monday unless more is done to stem the flow of undocumented migrants seeking to enter the United States via Mexico.

Economists had expected 185,000 jobs added in May, with some citing the hiring of potentially tens of thousands of workers for the decennial Census. Hiring in the previous two months was revised lower by a combined 75,000.

Unemployment remains at 3.6 percent, a 50-year low, while wages have grown 3.1 percent since this time last year. On the bright side, the USA unemployment rate was only at 3.6%.

Prospects for a rapid rate cut propelled another rally on Wall Street Friday.

In April, payrolls grew by a robust 263,000 while retail sales and manufacturing sent mixed signals.

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Stocks have surged since Fed Chairman Powell said on Tuesday the central bank would "act as appropriate to sustain the expansion", suggesting a possible rate cut as a solution to weakening economic data and uncertainty over trade. Chief US economist Tom Porcelli at RBC Capital Markets in NY said: "This number is just going to feed the narrative of the Fed imminently cutting rates".

In May, wages rose 3.1 per cent from a year earlier, down slightly from last month's gain of 3.2 per cent.

USA hiring stumbled in May as employers added just 75,000 jobs, a sign that businesses have become more cautious in the face of weaker global growth, widening trade conflicts and perhaps some difficulty finding enough workers. Still, it's below last year's pace of 225,000.

Cardillo said trade tensions may have made companies more hesitant to hire.

We got some sobering news today about the USA job market. President Donald Trump's threat to impose tariffs on Mexico following additional tariffs on China, could send the global economy toward a recession, some economists warn. If those who looked for a job in preceding 12 months were included as well as those who had a part-time job but wanted a full-time one, the rate declined to 7.1 percent-the lowest since December 2000. The jobless rate was partly pushed down by workers dropping out of the labour force over the last four months. Just three months earlier, wages had been rising at their fastest rate in a decade but gains have moderated since.

"We may have reached a peak in hiring", Peter Cardillo, chief market economist at Spartan Capital Securities, told The Post, adding that Friday's data "renewed hopes that the Fed is likely to cut".

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