U.S. employers slowed hiring in May

Marco Green
June 5, 2017

Economists had expected job gains of about 185,000 in May. Republicans' slow movement on both repealing and replacing ObamaCare and on enacting tax reform legislation is likely keeping jobs numbers a little on the low side.

The share of unemployed people fell by 195,000 in May, bringing the total reduction since the start of this year to 774,000.

"We still believe it is very likely that the Fed will hike later this month".

In fact, if the market was as horribly upset about it as the morning talk show pundits were, investors didn't show it. USA stocks closed at new highs. About 182,000 had been expected by economists. It fell from 4.4% to 4.3%. Restaurants and health care companies posted solid gains.

The professional and business services sector saw the greatest gain with 38,000 new jobs while employment in food services and drinking places followed at 30,000.

Mining added 7,000 jobs in May. Approximately 58% of the 433,000 additional job-seekers during the first quarter were young people between the ages of 15 and 34, the release said. "It's just part of the ups and downs from month to month". Workers generally enjoy higher incomes once they generate more value per hour on the job.

Beyond retail, it is much too soon to declare the job market in trouble. Over the past 12 months, job additions have averaged 188,000 per month. During the past year average hourly earnings have risen by 63 cents, or 2.5 percent.

Patrick Schaffer, global investment specialist with J.P. Morgan Private Bank in Los Angeles, said the decline in the broader unemployment measure was a good sign for the economy.

More than 400,000 people stopped looking for work entirely.

Cooler hiring may partly reflect the challenge of finding skilled and experienced workers amid a tightening job market. This implies that there is still room for improvement in the job market. It's been duly noted that over the years, fewer people are in the workforce. "If they want 10 workers, I send 20, because half of them won't show up". "If there is a dark cloud in the data, it is that there aren't enough qualified workers to fill the available jobs".

So now, while the labor participation stands at 62.7%, it's not moving higher just because companies are not hiring. Those three sectors were relatively weak in April. The margin of error for the jobs report is also substantial, and the figure is sometimes revised significantly in following months. Small businesses added 83,000 jobs.

Mr Trump has made protecting American jobs a centrepiece of his presidency.

"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. While minimum-wage increases in many states have pushed pay up in those sectors, employment growth in those fields drags on overall wage gains.

While those numbers are admirable, it's the others that are troubling.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, points out that the survey was also carried out relatively early in the month in May, meaning it may have missed out on seasonal hiring that builds through Memorial Day.

Other reports by Click Lancashire

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