The US adds 75,000 Jobs in May as hiring slows
Posted on June 8, 2019
The US economy gained 75,000 jobs in the month of May 2019. It also marked the 104th consecutive month for gains. This was, however, the weakest monthly gain as well after the end of the recession. The latest statistics have been announced by the US Department of Labour.
US employers restrained hiring for the month of May. It shows that the firms are being more cautious at a time of trade tensions and cooling global growth. This also added to other indications of a slowdown in spring in the US economic expansion lasting for a decade.
The lesser than expected 75,000 jobs added in May further fuelled the concerns of investors regarding slowing growth of the US economy. The Federal Reserve could be spurred towards easing fiscal policy due to decreased jobs along with increasing tensions in global trade. The stocks were again driven higher on bets for lower rates of interest.
The rate of unemployment was steady at its lowest level in almost the last 5 decades. However, the wage growth was missing and revisions were downwards from April to March. This is giving rise to fears that the economy of the US is slowing faster than anticipated in Q2-2019.
A few Analysts referred to the decline in the Services sector as a worrying trend that can boost bets on rate cuts. Industries that were changed marginally for hiring in May include Manufacturing, Construction, and Mining. This was another downward trend for those watching signs that tensions in trade are hurting the US economy.
The latest report increases the focus of investors on Retail sales figures, industrial production and inflation for next week. Retail sales and industrial production fell unpredictably in April. Further decrease in figures can lead to an enhanced decline for estimates of economic growth, as quoted by the WSJ.
The rate of unemployment in the US for May 2019 was 3.6% reaching almost a low for 50 years. Superficially, that makes you pause when you consider the background over which rates could be cut by the Federal Reserve. This was the view of Head of Treasury Trading at R.W. Pressprich & Co Larry Milstein.
Nevertheless, the earlier 2 instances must be considered when the Fed shifted to a cycle of lowering interest rates from raising them. At that time, the rate of unemployment was also lower than levels that are considered by economists to represent the economy at full employment.
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