The US economy added 138,000 jobs in May, according to the Bureau of Labor Statistics, below market expectations of 185,000 jobs.
The estimate for job gains in March and April was lowered by the combined 66,000. Over the past three months, job growth has averaged 121,000 per month. The pace of hiring is sufficient to provide jobs to a growing population.
The unemployment rate, which is derived from a separate survey of households, fell from 4.4 per cent in April to 4.3 per cent, the lowest level since 2001. The US is near full employment, or the point at which everyone who wants a job at the current wage can get one. A weaker May figure partly reflects a challenge of finding skilled workers to fill vacancies amid the tightening labour market.
The decline in the rate of joblessness was also due to a drop in the size of the labour force. The labour force participation rate, the share of the working-age population either employed or seeking a job, fell by 0.2 percentage points to 62.7 per cent. The fall is a sign that sidelined workers were not joining the labour force.
The number of part-time workers who would prefer a full-time position, a measure known as part-time for economic reasons, fell by 53,000 to 5.22 million. The U-6 or underemployment rate – which includes people working part-time for economic reasons and those who have become too discouraged to keep looking for work so aren’t counted as unemployed – fell to 8.4 per cent, the lowest level since November 2007.
Professional and business services added 38,000 jobs. Health care and social assistance employment rose by 32,300. Employment in the lower-paying leisure and hospitality sector was up by 31,000. Construction companies hired 11,000 workers. Retailers cut 6,100 positions. The manufacturing sector lost 1,000 jobs.
The US economy is adding jobs at a solid pace, but American workers are not seeing a significant pickup in wage growth. The average hourly earnings grew 0.2 per cent, bringing the year-on-year increase to 2.5 per cent, well below growth of around 3.5 per cent seen before the financial crisis.
With the unemployment rate at the lowest level since 2001 and jobs growth continuing, Fed policymakers are widely expected to raise benchmark interest rates by a quarter-point, when they meet on June 13 and 14.
