The Financial Express

US jobs growth slows down in May

| Updated: July 08, 2019 11:57:55

US jobs growth slows down in May

The US economy created far fewer jobs than expected last month and wages also rose less than forecast, according to BBC.

Some 75,000 jobs were created in May rather than the 185,000 expected by analysts, the Bureau of Labor Statistics said.

The dollar dropped as markets assumed that the slower-than-expected job growth meant a rate cut by the US Federal Reserve was more likely.

But the US unemployment rate remained at 3.6 per cent, its lowest level for 50 years.

The US dollar fell more than 0.4 per cent against the pound, the euro and the yen after the jobs figures were published.

"While the US jobless rate remains at its historic low of 3.6 per cent, far fewer jobs are being created and wage rises are modest," said David Lamb, head of dealing at Fexco Corporate Payments.

"Add a weakening economy to the absence of inflation and the conventional answer is an interest rate cut," he added.

"While few expect the Fed to cut rates this month, the likelihood of a July cut has risen sharply - and as a result the greenback has swooned."

Monthly wage growth remained moderate, with average hourly earnings increasing by six cents, or 0.2 per cent, in May following a similar gain in April. That lowered the annual increase in wages to 3.1 per cent from 3.2 per cent.

The number of people unemployed was "little changed" at 5.9 million, the Bureau of Labor Statistics said.

The US economy has been largely resilient to the country's trade war with China so far.

In early May, US President Donald Trump raised tariffs to 25 per cent on $200 billion of Chinese goods, prompting retaliation from China.

But analysts have warned that the trade fights could undermine the economy.


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