Hiring slowed last month, as U.S. employers added just 75,000 jobs even as the unemployment rate held steady at 3.6%. The report suggests businesses are increasingly cautious in the face of the Trump administration’s ongoing trade wars. And it could increase the odds of interest rate cuts.
The job gains in May were well below economists’ forecasts of 185,000 jobs and the three-month average of 151,000 jobs. Revised job gains of 153,000 for March and 224,000 for April represented a total drop of 75,000 from initial figures.
Manufacturing continued to be a soft spot, with just 3,000 factory jobs added in May. An index of manufacturing activity released Monday fell to its lowest level in 2 1/2 years.
Manufacturing is especially sensitive to trade disputes, which can raise costs, disrupt supply chains and depress foreign demand. Last month, the administration increased tariffs on $200 billion worth of imports from China. The president has also threatened to impose tariffs on imports from Mexico, beginning next week.
There’s increasing evidence that the ongoing trade war here is beginning to have some tangible effects on the U.S. economy,We’re not on the edge of the cliff here. But the pace of expansion in [manufacturing] is the slowest of the Trump era.
said Tim Quinlan, a senior economist at Wells Fargo Securities.
The picture is only somewhat brighter in the much larger services sector, where tariffs seem to be taking less of a toll. An index of service activity released on Wednesday showed accelerating growth. But private employers added just 82,000 service jobs in May, less than half the number of the month before.Read More
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