Jobs Added in May, Unemployment at 16-Year Low

The new unemployment numbers are the lowest in ten years, according to the Associated Press.

Job growth slowed last month, according to this morning's report from the Bureau of Labor Statistics. The unemployment rate declined to 4.3%, its lowest level during this economic expansion, though it was driven by a sequential decline in labor force participation to 62.7% from April's 62.9%.

The unemployment rate in America is at a 16-year low. The economy created 66,000 fewer jobs than previously reported in March and April.

Each of the last two monthly job gains were revised down in Friday's report, with March's payroll growth coming down by 29,000 and April's gains coming down by 37,000. Pantheon Macroeconomics' chief economist, Ian Shepherdson, observed that "employers are still able to find the people they want, though surveys and anecdotal evidence strongly suggest that it is becoming harder to find qualified staff". Meanwhile, there was little change in the average workweek while average hourly earnings rose slightly, continuing a trend that goes back a year and has contributed to an increase in average wages of 63 cents per hour, or roughly 2.5%.

On the currency front, the US dollar is trading at 110.73 yen compared to the 111.37 yen it fetched at the close of NY trading on Thursday.

The jobs report was the last major economic indicator to be released before Federal Reserve monetary policymakers gather in Washington on June 13 to decide whether to raise their key short-term interest rate.

On Friday, when the government releases the jobs report for May, that pattern is likely to extend itself. Health care and social assistance added almost 37,000 jobs and professional services 39,000.

Meanwhile, state and local governments shed 9,000 workers, while retailers cut 6,100 jobs. The wholesale and retail trade unemployment rate likewise fell from 4.8 percent in April to 3.1 percent in May.

But the poor job growth also might light a fire under Congress to pass legislation that Trump and his advisors think will lead to a better economy.

Still, there is one element that is encouraging: the share of people aged 24 to 54 who are either working or looking for work stayed steady from the prior month. As more people start seeking jobs, employers begin to have less incentive to raise pay.

So now, while the labor participation stands at 62.7%, it's not moving higher just because companies are not hiring.

"We're not seeing a lot of upward pressure on hourly wages", said Mark de Gorter, the chief operating officer.

The dollar hit a seven-month low against a basket of currencies on the diminishing rate hike prospects in the second half of the year. Economists had expected growth of more than 180,000. That's right in line with the monthly average of 174,000 over the past three months. "The weak job growth number isn't a disaster because it still keeps up with population growth", said Paul Diggle, senior economist at Aberdeen Asset Management.

This is a new post-crisis low for the unemployment rate - which is now at its lowest level since May 2001 - while headline job gains missed expectations.