Total nonfarm payroll employment edged up in May (+75,000), and the unemployment rate remained at 3.6 percent, the U.S. Bureau of Labor Statistics reported today.
As Calculated Risk reports, that number falls far below expectations. (We weren’t the only ones expecting better.)
The headline jobs number at 75 thousand for May was well below consensus expectations of 180 thousand, and the previous two months were revised down 75 thousand, combined. The unemployment rate was unchanged at 3.6%. Overall this was a weak report.
Still, CR adds,
In May, the year-over-year employment change was 2.350 million jobs. That is decent year-over-year growth.
The BLS wage numbers also disappointed.
In May, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $27.83. Over the year, average hourly earnings have increased by 3.1 percent. Average hourly earnings ofprivate-sector production and nonsupervisory employees increased by 7 cents to $23.38 in May.
Again, the comment from CR:
Wage growth has generally been trending up, but has weakened recently.
The Associated Press reports the recent data heightens concerns about the weakening expansion and actions the Fed may take to stimulate growth.
The tepid job growth, along with rising pressures on the economy, makes it more likely that the Federal Reserve will cut rates in the coming months. Bond yields fell after the jobs data was released, signaling investor expectations for lower Fed rates….
The economy is showing signs of sluggishness just as the current expansion has reached its 10th anniversary. Next month, it will become the longest period of uninterrupted growth on records dating to 1854. Yet consumers have turned cautious about spending, and companies are scaling back their investment in high-cost machinery and equipment.
The economy expanded at a healthy 3.1% annual rate in the January-March quarter, but the Federal Reserve Bank of Atlanta estimates that annual growth will slump to just 1.5% in the April-June quarter.
While predictions of a slowdown have been offered repeatedly in the last 24 months only to be defied by strong economic growth, eventually the expansion will end. Which is why we’ve been concerned about successive double-digit state budget increases of doubtful sustainability. The Washington Research Council has just reported that, with vetoes, this year’s adopted budget for 2019-2021 amounts to an 18.4 percent spending increase.