The United States failed to sustain the employment gains it made in April after creating just 75,000 new jobs in May.
This is coming after MarketWatch had estimated that 185,000 jobs would be created in May. A staggering 263,000 jobs were created in April, but the hopes of any improvement more than that was dashed after numbers for May emerged on Friday.
Experts say that April’s job result is disappointing. However, the news is not all that bad. Unemployment rate is still at a 49-year low of 3.6% and a broader measure of joblessness that includes part-time workers, known as U6, dipped to the lowest level in 19 years.
Some experts have attributed the latest development to the trade tensions between the United States and China as there is a growing shortage of skilled workers.
How the job creation was shared:
Healthcare providers hired 16,000 workers while professional-oriented companies added 33,000 jobs. Hotels and restaurants employed 26,000.
Construction companies added just 4,000 new workers while government cut 15,000 jobs.
Experts believe more time is needed to determine if hiring is slowing down.
This is because, even with the unpalatable job report for May, an average wage paid to American workers rose 6 cents to $27.83 an hour, the increase over the past 12 months slowed to 3.1% from 3.2%. It peaked at 3.4% earlier this year.
“Today’s 75,000 jobs number could mark the beginning of the end of the strong jobs expansion, or it could be an outlier. We’ll have to see another couple months of jobs numbers before we can establish hiring is slowing down,” said Robert Frick, corporate economist at Navy Federal Credit Union.
It is expected that the Fed will cut interest rates to help shore up the economy if they notice further weakness in the economy.
By and large, the labor market is still performing better than it has ever been in decades.