Job growth in the United States came to a dramatic halt in May, as 75,000 jobs were created last month, the Department of Labor announced on Friday. Economists expected a gain of 185,000 jobs, according to MarketWatch.
The unemployment rate held steady at 3.6%, which is the lowest level seen since December 1969. Average hourly earnings rose by 0.2%, the same rate as in April. Over the last 12 months, earnings have risen by 3.1%.
“This is clearly a surprise to see such disappointing job growth and the growing economic uncertainty is worrying,” said Sue Holloway, CCP, CECP, director of executive compensation strategy at WorldatWork. “While we watch the external landscape for signs and signals, we continue to experience a very competitive labor market where organizations find it challenging to attract and retain qualified workers.”
The Federal Reserve has signaled that it would consider a rate cut in the event of economic weakness. May’s data could factor heavily in its decision to do so.
“This gives us a real sense of deceleration in the U.S. economy,” Diane Swonk, chief economist at accounting firm Grant Thornton, told the New York Times. “We knew this was occurring, but this could be a summer of discontent. It also gives the Fed a green light to cut rates.”
Friday’s report also revised employment data for April and March, which resulted in 75,000 fewer jobs.The DOL’s report was more optimistic than the report released by ADP on Wednesday, which showed job gains of 27,000 in May — the fewest since March 2010.
The DOL’s report found that hiring in manufacturing, mining and logging, and construction slowed in May, while the services sector performed well. The professional and business services category registered a 33,000 increase and health care added 24,000 jobs.
About the Author
Brett Christie is a staff writer at WorldatWork.