U.S. job growth slows; unemployment rate drops to 4.3 percent

[techbeck]

U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent.

 

Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labor Department said on Friday. The economy created 66,000 fewer jobs than previously reported in March and April.

 

Last month's job gains could still be sufficient for the Federal Reserve to raise interest rates at its June 13-14 policy meeting. The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

 

"While the message was a little muddied today, the evidence generally suggests the labor market is cyclically tightening, and the Fed will need to continue to lean against that," said Michael Feroli, an economist at JPMorgan in New York.

 

"We still believe it is very likely that the Fed will hike later this month. Perhaps more in question is the signal coming out of that meeting regarding subsequent hikes."

 

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http://www.reuters.com/article/us-usa-economy-idUSKBN18T0BT