US employment slows down during trade and weaker global economy
WASHINGTON (AP) – US employment stumbled in May as employers added only 75,000 jobs, a sign that businesses have become more cautious in the face of weaker global growth, expanding trade conflicts and perhaps some difficulty finding enough workers.
Last month's modest job gain followed a much healthier increase of 224,000 in April. The Ministry of Labor said on Friday that unemployment remained at almost 50 years low at 3.6%.
The weak job growth, along with increasing pressure on the economy, makes the Federal Reserve more likely to cut prices in the coming months. Bond yields fell after the job data was released, and signaled expectations of lower Fed prices. Equity investors also signaled their approval, with the Dow Jones Industrial Average up to nearly 300 points in late-day trading.
On Friday, the government also changed the economy's rental income for March and April by a total of 75,000. In the first five months of the year, employment averaged 1[ads1]64,000 a month, a solid pace that is enough to lower unemployment over time. Nevertheless, it is below last year's pace of 225,000. Last month, President Donald Trump announced an increase in US $ 200 billion in Chinese imports from 10% to 25%. And last week, he threatened to impose 5% tariffs on all Mexican imports into the US at the beginning of Monday. These taxes will rise every month until they reach 25% in October unless the Mexican government turns off a stream of Central American immigrants entering the United States from across Mexico.
The economy shows signs of inertia just as the expansion has reached its 10th anniversary. Next month, it will be the longest period of uninterrupted growth on registers dating back to 1854. However, consumers have become cautious about spending, and companies are scaling back investment in high-cost machines and equipment.
Economists warn that corn job numbers only cover one month, and that broader trends indicate that hiring remains stable. They also noticed that Mays weaker employment data went ahead of Trump's threat last week to impose 5% tariffs on Mexico. So the full impact of the fighting will probably show up in the coming months.
"This looks like an economy that is being lowered, which doesn't mean we necessarily come into a recession," said Martha Gimbel, director of economic research at the workplace area. "Coming in the context of tariffs and other financial headwinds makes this number more worrying."
The economy expanded with a healthy 3.1% annual interest rate in the January-March quarter. The Federal Reserve Bank of Atlanta estimates that annual growth will fall to 1.5% in the April-June quarter.
The decline in employment may mean that some employers have only difficulty finding the workers they need, as the work pool is relatively small. Nevertheless, wages should rise faster than they are as employers compete for workers.
Average hourly wage rose only 3.1% in May from the year before, somewhat lower than last month's 3.2% last year. It was the smallest annual increase since September. Smaller increases, combined with slower hiring, can reduce consumer willingness to spend in the coming months.
Leasing was weak in a number of industries in May. Manufacturers added only 3,000 jobs, a fourth straight month with anemic gains. Construction companies employed only 4000, financial services only in 2000.
Employers in several industries cut payrolls. Dealers scrap workers for a fifth straight month as stores struggle with online competition. A category that includes telecom, publishing and media throwing 5000 jobs. Federal, state and local authorities cut a total of 15,000.
Software and technology companies remain a bright place. Paul McDonald, senior manager of staffing company Robert Half International, said mobile app developers, data analysts, coders, and senior financial analysts are still receiving more offers and strong payrolls.
"It's still a job seeker's market, he says.
Keeper Security, a network security company, said last month that it would expand its headquarters in Chicago and add 130 jobs over the next six months to about 160 Current Employees
CEO Darren Guccione said his company has not had much trouble finding candidates to fill their programming, sales and marketing jobs, hiring software developers in its Sacramento office and attracting employees who are Tired of the high cost of living in San Francisco.
"We see great pools of candidates," he said.
Trade Conflicts have had no impact on the company, Guccione said.
Customs have influenced industry and retail companies more than they have software companies and have become a growing threat to the economy.
The higher cost of import taxes – and the potential for more – for Causes Some Businesses Scale Expenditure, Investment, and Expansion Plans. A strong dollar, which makes US goods more expensive abroad, has also slowed down the production and export of manufactured goods. The factory exit fell 0.5% in April, according to a Fed report.
Car manufacturers cut jobs and production as US sales have declined. Analysts expect car sales to fall below 17 million this year after four years above this level.
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