The U.S. job market hit a speed bump in May as nonfarm employers added a seasonally adjusted 38,000 jobs, the smallest monthly gain since the economy stopped losing jobs in 2010. The jobless rate fell to 4.7%, reflecting a contraction in the size of the labor force. The Labor Department report came less than two weeks before Federal Reserve officials gather for their June 14-15 policy meeting. Here’s how economists and analysts reacted to Friday’s dismal report....MORE
“This was an unqualified dud of a jobs report, with the weakest month of job gains since 2010. The unemployment rate fell, but for the wrong reason as labor force participation declined for the second consecutive month. As for the Fed, this likely puts an end to the hopes of a rate hike in June, and will probably shift market expectations to September.” –Curt Long, National Association of Federal Credit Unions
“Whether or not the May report is an aberration or the leading edge of a period of weaker job market conditions remains to be seen. As corporate America grapples with lackluster earnings results, capital expenditures have already been slashed. Whether or not the business sector next starts to curtail hiring plans to further tighten their belts remains an open question, but a risk that shouldn’t be overlooked. It will take more than one report to conclude that is the case though.” –Jim Baird, Plante Moran Financial Advisors
“So is the economy suddenly plummeting into recession? Er…no. [Gross domestic product] growth has clearly accelerated in the second quarter and all the other labor market indicators remain at healthy levels. Nevertheless, it could be enough to prompt the Fed to delay the next rate hike until September. [Fed Chairwoman Janet] Yellen should provide more insight on the Fed’s thinking on Monday [when she delivers a speech in Philadelphia].” –Paul Ashworth, Capital Economics
“Going into the payroll number, it was clear that unless the jobs report was horrible the Fed was going to hike in either June or July. This now assures that June is off the table but may not rule out July. Although this number was well below expectations on payrolls, the drop in the jobless rate and the hourly earnings suggests the Fed will want to see if this number holds up to revision.” –Steven Ricchiuto, Mizuho Securities USA
Also at RTE:
The May Jobs Report in 12 Charts
May Jobs Report – The Numbers
