US job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labour market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 per cent.
Non-farm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the US labour department said on Friday. March and April data was revised to show 66,000 fewer jobs created than previously reported. May’s job gains marked a sharp deceleration from the 181,000 monthly average over the past 12 months.
While last month's job gains could still be sufficient for the Federal Reserve to raise interest rates this month, the modest increase could raise concerns about the economy's health after growth slowed in the first quarter.
The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. Job gains are slowing as the labour market nears full employment.
The unemployment rate fell one-tenth of a percentage point to its lowest level since May 2001. It has dropped five-tenths of a percentage point this year. Last month’s drop came as people left the labour force. The smaller and more volatile survey of households also showed a drop in employment.
Economists had forecast payrolls increasing by 185,000 jobs last month and the unemployment rate holding steady at 4.4 per cent. – Reuters
