Plummeting New Job Numbers in May

June 7, 2019 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.

Economy

Mulling Presidential Run, Mark Sanford Says Government’s Precarious Finances Are Nation’s Biggest Threat Political News
Mulling Presidential Run, Mark Sanford Says Government’s Precarious Finances Are Nation’s Biggest Threat
August 16, 2019
by Dan McCue

WASHINGTON - Back home in South Carolina after a mid-week trip to New Hampshire, former Rep. Mark Sanford said Friday he was pleased with how things went in the Granite State and his decision on whether to mount a primary challenge against President Trump will be... Read More

Katko, Brindisi Launch Bipartisan Effort to Address Lake Ontario Woes
Katko, Brindisi Launch Bipartisan Effort to Address Lake Ontario Woes
August 15, 2019
by Dan McCue

WASHINGTON - Representatives John Katko and Anthony Brindisi have launched a bipartisan effort to hold the international commission that manages outflows from Lake Ontario accountable for recent historic flooding. Katko, a Republican, and Brindisi, a Democrat, have gotten the Government Accountability Office, a nonpartisan group that... Read More

As Recession Fears Grow, Trump Delays Tariffs On Some Chinese Goods Economy
As Recession Fears Grow, Trump Delays Tariffs On Some Chinese Goods
August 13, 2019
by Dan McCue

WASHINGTON -- After days of growing indications the U.S. may lapse into a recession before the 2020 election, the Trump administration announced Tuesday that it is delaying some of the additional tariffs it planned to impose on Chinese goods on Sept. 1. The announcement, which was... Read More

Houlahan, Balderson Lead Bipartisan Effort to Bolster Grants To Spark Small Business Innovation Business
Houlahan, Balderson Lead Bipartisan Effort to Bolster Grants To Spark Small Business Innovation
August 6, 2019
by Sean Trambley

Freshman Representative Chrissy Houlahan, D-Penn., was joined by Representative Troy Balderson, R-Ohio, to introduce bipartisan and bicameral legislation to enhance commercialization services for federally funded research and development.  Introduced in the House on July 18, H.R. 3839, the Research Advancing to Market Production (RAMP) for Innovators... Read More

US Labels China a ‘Currency Manipulator’ As Stocks Fall And Trade War Worsens Trade
US Labels China a ‘Currency Manipulator’ As Stocks Fall And Trade War Worsens

WASHINGTON — The U.S.-China trade war took a dangerous turn for the worse Monday as Beijing allowed its currency to weaken and said it was halting new American farm purchases, sending U.S. stocks in a tailspin and heightening risks of a global economic downturn. The Chinese... Read More

Fed Cuts Interest Rate Cut For First Time Since 2008 Economy
Fed Cuts Interest Rate Cut For First Time Since 2008

WASHINGTON — The Federal Reserve on Wednesday cut interest rates for the first time since the Great Recession in 2008, a risky move that clashes with its historical practice of taking such a step only when the economy is in real trouble. The small, quarter-point reduction... Read More

Straight From The Well
scroll top