Plummeting New Job Numbers in May

June 7, 2019 by Dan McCue
Plummeting New Job Numbers in May
(Photo by Dan McCue)

WASHINGTON – Employers added just 75,000 new jobs in May, the Labor Department said Friday, a stunning development that took many economists by surprise.

In a recent survey by Dow Jones, the consensus among economists was that the job gain for the month would be closer to 180,000.

The slowdown in hiring came at a time when the unemployment rate remains at a 50-year low. Friday’s report is the second in four months in which fewer than 100,000 jobs were added to the nation’s payrolls, suggesting the labor market is weakening.

In addition to the anemic total for May, the Labor Department on Friday also significantly revised down its previously reported job numbers for March and April.

March’s count fell from 189,000 to 153,000 and the April total went from 263,000 to 224,000.

What job growth there was in May was primarily in the professional and business services, which saw 33,000 new hires.

The healthcare sector added 16,000 jobs, while construction added 4,000 and manufacturing, another 3,000.

In the meantime, the retail sector lost 7,600 jobs.

Gad Levanon, chief economist for North America, at The Conference Board, a think tank in Washington, said Friday’s report is consistent with the growing sentiment among markets and economists that the US economy is slowing down.

“Some of this slowdown is coming from the manufacturing sector, where employment growth has almost come to a halt. The slowdown in employment growth could also reflect stronger automation efforts by employers struggling with recruiting and controlling labor cost growth in a tight labor market,” Levanon said.

“We still expect the US economy to continue to grow slightly above its long-term two percent trend through at least the end of the year, generating enough job growth to continue tightening the labor market,” he said.

Wage gains also slowed in May. Average hourly earnings year-over-year declined to 3.1%, one-tenth of a point lower than expectations. The average work week held steady at 34.4 hours.

However, the Conference Board’s Levanon said with the labor market continuing to tighten, he expects acceleration in wages to resume later in the year.

The unemployment rate remained at 3.6%, in line with forecasts and the lowest since December 1969.

Investors have been worried in recent months about slowing growth amid an escalating trade war between the U.S. and China, and more recently, the U.S. and Mexico.

Earlier this week, those concerns deepened when the World Bank announced the global economy has slowed to its lowest pace in three years, forcing the bank to lower its expectations for the world economy for the remainder of the year.

In January the World Bank said it expected the global economy to expand at a rate of 2.9 percent. On Tuesday, it lowered its sites to 2.6 percent.

Christine Lagarde, managing director of the International Monetary Fund, has also been talking about a deceleration in global economic growth this week, though she said a global recession continues to be unlikely.

Last month the IMF said current and threatened U.S.-China tariffs could cut 2020 global gross domestic product by 0.5%, or about $455 billion.

The estimate includes a recent U.S. tariff increase to 25% on a $200 billion list of Chinese imports as well as Trump’s threat to tax another $300 billion worth of consumer imports, representing nearly all trade between the world’s two largest economies.

However, the IMF estimate did not take into account President Trump’s threatened 5% tariffs on goods from Mexico starting on Monday.

In the aftermath of the U.S. trade dispute with Beijing, Mexico had overtaken China as the United States’ largest trading partner.

The gloomy jobs report, along with other rising concerns about the economy, make it likelier that the Federal Reserve will cut rates in the coming months.

A+
a-
  • Employment
  • jobs
  • U.S. Economy
  • In The News

    Health

    Voting

    Economy

    Inflation Slowed Further in December as Economic 'Soft Landing' Moves Into Sharper Focus

    WASHINGTON (AP) — The Federal Reserve’s preferred inflation gauge cooled further last month even as the economy kept growing briskly, a... Read More

    WASHINGTON (AP) — The Federal Reserve’s preferred inflation gauge cooled further last month even as the economy kept growing briskly, a trend sure to be welcomed at the White House as President Joe Biden seeks re-election in a race that could pivot on his economic stewardship. Friday’s... Read More

    Americans' Economic Outlook Brightens as Inflation Slows and Wages Outpace Prices

    WASHINGTON (AP) — After an extended period of gloom, Americans are starting to feel better about inflation and the economy —... Read More

    WASHINGTON (AP) — After an extended period of gloom, Americans are starting to feel better about inflation and the economy — a trend that could sustain consumer spending, fuel economic growth and potentially affect President Joe Biden's political fortunes. A measure of consumer sentiment by the University of Michigan has... Read More

    Some Americans Will Get Their Student Loans Canceled in February as Biden Accelerates New Plan

    WASHINGTON (AP) — The Biden administration will start canceling student loans for some borrowers in February as part of a new... Read More

    WASHINGTON (AP) — The Biden administration will start canceling student loans for some borrowers in February as part of a new repayment plan that's taking effect nearly six months ahead of schedule. Loan forgiveness was originally set to begin in July under the new SAVE repayment plan, but... Read More

    In Milwaukee, Biden Looks to Highlight Progress for Black-Owned Small Businesses

    WASHINGTON (AP) — President Joe Biden is aiming to use a visit to the battleground state of Wisconsin on Wednesday... Read More

    WASHINGTON (AP) — President Joe Biden is aiming to use a visit to the battleground state of Wisconsin on Wednesday to spotlight a surge in federal government support for Black-owned small businesses during his White House tenure and to highlight his administration's efforts to ramp up... Read More

    Wall Street Rises on Hopes for Rate Cuts, as Dow Ticks Toward Another Record

    NEW YORK (AP) — Wall Street is ticking higher Thursday following its big rally the day before on excitement that... Read More

    NEW YORK (AP) — Wall Street is ticking higher Thursday following its big rally the day before on excitement that several cuts to interest rates may indeed be coming next year. The S&P 500 was 0.3% higher in morning trading and within 1.5% of its all-time... Read More

    Biden to Convene New Supply Chain Council, Announce 30 Steps to Strengthen US Logistics

    WASHINGTON (AP) — President Joe Biden on Monday will convene the first meeting of his supply chain resilience council, using the event... Read More

    WASHINGTON (AP) — President Joe Biden on Monday will convene the first meeting of his supply chain resilience council, using the event to announce 30 actions to improve access to medicine and needed economic data and other programs tied to the production and shipment of goods. “We’re determined... Read More

    News From The Well
    scroll top