Struggles Of US Job Hunting
Thud. The numbers are in. A report from the US Bureau of Labor Statistics has revealed the job growth numbers for May. 185,000 new American jobs had been expected, only 75,000 materialized.
The finger-pointing has already begun. First, at tornadoes. Weather in the Southwest of the country caused delays to construction, resulting in postponed job growth. However, it was tariffs on ‘Made in China’ apparel that punished retail, and their uncertain effect on manufacturers that explain why the US failed to recruit in May. Given the job flop, President Trump made a timely pause to his trade war-ing late on Friday, agreeing to let Mexican tariffs slide. Those were due for today.
March and April also disappointed, but not on this scale. As for wage growth, a slight dip since last month, losing one basis point from 3.2% to 3.1%. These figures up the ante on the Federal Reserve to take action, and elevate the stock market with an interest rate cut. Economist Andrew Hunter of Capital Economics said he was becoming “increasingly convinced” those cuts will come “later this year.” Barclay’s US economist, Michael Gapen, is banking on even sooner cuts in July. As this new data lumps pressure on the Fed, it remains to be seen whether that will help stocks climb, or instead create an aura of fear around the state of the economy. Many investors spent Friday rotating into safer bonds.
However, it’s not all doom and gloom. While fewer people have started new jobs, even fewer have lost jobs. The US still enjoys its lowest unemployment rate since 1969 at 3.6%, and workers’ pay edged up slightly too, according to this report. Bring on the opening bell.
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