Though Economists had forecast that nonfarm payrolls grew by 160,000 in the month of May, employers added the fewest workers in six years with a mere growth of 38,000 jobs. Job gains in March were revised down again from 208,000 to 186,000 and gains in April from 160,000 to 123,000. With these two revisions, employment gains in March and April combined were 59,000 less than previously reported. While month-on-month job gains have slowed since October, the unemployment rate fell to an eight-year low of 4.7 percent in May and the number of unemployed persons declined by 484,000.
The labor-force participation rate changed little from last month by 0.2 percent while the number of long-term unemployed (those jobless for 27 weeks or more) declined by 178,000. Additionally the number of persons unemployed less than 5 weeks decreased by 338,000 and the number of people who lost jobs or completed temporary work declined by 282,000 over the month. The number of persons that were employed part-time for economic reasons (those wanting full-time employment that work part-time because either their hours had been cut or because they were unable to find a full-time job) increased by 468,000, after showing little movement since November.
Job growth occurred in health care (+46,000), professional and business services (+10,000), and technical services (+26,000) while employment in durable goods declined (-18,000) and mining continued to lose jobs (-10,000). Since reaching a peak in September 2014, mining has lost a total of 207,000 jobs. Employment in other major industries, including construction, wholesale trade, retail trade, transportation and warehousing, financial activities, leisure and hospitality, and government changed little over the month.
In May, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents, following an increase of 9 cents in April. Over the year, average hourly earnings have risen by 2.5 percent and average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents.
The May Jobs Report was the weakest in at least two-and-a-half years with the three month average of job gains at 116,000. The Federal Reserve was slated to raise interest rates in the next few months but with the labor market slowing, there might be cause to delay once again.