US job figures hint at slowdown

Latest US jobs figures for May fell short of expectations, suggesting employment growth may be slowing after a long stretch of strong gains.

US firms added only 138,000 jobs in May, compared with forecasts of 182,000, although the gains were enough to help push the unemployment rate down to a 16 year-low of 4.3 per cent according to the labour department’s non-farm payroll figures.

The US government also revised down its estimate of job growth in March and April by a combined 66,000.

Average hourly earnings have risen 2.5 per cent over the past year.

The figures will be seen as a blow to president Donald Trump who campaigned on delivering a significant improvement in the jobs market.

Michael Hewson at CMC Markets UK said: “The fall in the unemployment rate to 4.3 per cent was a positive development, however it was offset by the fact that the participation rate fell back from 62.9 per cent to 62.7 per cent suggesting that people were leaving the workforce.

“Some have suggested that the disappointing headline number is down to a tightening in the US labour market but that doesn’t chime with a falling participation rate and wage growth that remains stuck at 2.5 per cent.”

Darren Ruane, head of fixed interest at Investec, said: “Despite the disappointing economicnews,thebigpicture remains that the unemployment rate is close to normal cycle lows and the likelihood of a US interest rate rise later this month has not diminished. Fed policymakers will likely focus on the second round effects of a tight labour market and may ignore this data as short-term economic noise.”