Economy Stumbles With Only 75,000 New Jobs in May

(CN) – Marking a sharp decline in the pace of hiring, American employers added just 75,000 jobs last month as the unemployment rate held steady at 3.6%.

The number of new positions pales in comparison to the revised 224,000 jobs added in April and falls well below economists’ prediction of about 180,000 new jobs in May. It is the smallest gain since the paltry 33,000 jobs added February.

The slowdown in hiring, along with other economic pressures such as the trade war with China, could lead the Federal Reserve to cut rates this year.

The unemployment rate of 3.6% is unchanged from the month before and is still the lowest level in nearly 50 years. Average hourly wages were up 3.1% from a year ago, a slight drop from the 3.2% rate seen in March and April.

Professional and business services like engineering and accounting gained 33,000 new positions in May, while the health care industry added 16,000 jobs and construction companies added just 4,000, according to a Labor Department report released Friday.

Some industries cut jobs, with 15,000 fewer government positions last month and a loss of more than 7,000 retail jobs.

Job growth in the U.S. has averaged 164,000 new positions a month so far this year, which is a healthy pace but below last year’s monthly average of 223,000.

Despite the disappointing job numbers, last month’s gain continued the longest streak of job creation on record. The American economy will mark 10 years of growth in July.

The gross domestic product, a primary indicator of economic health, grew at a 3.1% rate in the first quarter of this year, but economists predict it will slow to 2% or lower for the April-June quarter as effects from the 2017 tax cuts fade.

President Donald Trump’s year-long trade war with Beijing shows no sign of ending, as his administration last month levied additional tariffs of up to 25% on $200 billion in Chinese products and has threatened to extend the tariffs further.

Trump is also eyeing Mexican imports, planning to implement a 5% tariff on them next week that could jump to as high as 25% in October if Mexico doesn’t crack down on the flow of immigrants to the U.S. border.

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