The weak jobs number could increase the odds that the Federal Reserve cuts interest rates sooner rather than later. After Powell's comments and the lackluster employment statistics, investors are hopeful that the Fed will reduce interest rates in the future to help boost the economy. They also noted, though, that May's weaker hiring data preceded Trump's threat last week to impose 5% tariffs on Mexico.
United States employers added only 75,000 net new positions last month, less than half the 180,000 economists had been expecting, with sudden drops in hiring in healthcare, education and construction.
"This morning's jobs report is consistent with an economy that is continuing to slow from expansion highs", Duncan said. "With only 75,000 new jobs in May, this is a major slowdown from 2017, 2018 and the first four months of 2019".
USA unemployment continued to hover near a 50-year low last month, remaining unchanged at 3.6 percent, while annual wage growth in May increased 3.1 percent. The Indiana unemployment rate is slated to be released June 21. Stocks on Wall Street were trading higher.
"It's a little bit disappointing but it does not really cause to change our outlook for the year", he said.
Meanwhile, average hourly wages rose 0.2 percent compared to April to 27.83 USA dollars, disappointing economists who had hoped for slightly stronger gains.
US hiring slowed in May as employers added just 75,000 jobs, a sign that businesses have become more cautious in the face of slowing global growth and widening trade conflicts.
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The picture is only somewhat brighter in the much larger services sector, where tariffs seem to be taking less of a toll.
Meanwhile, Trump has also announced a 5 percent tariff on imports from Mexico, effective June 10, in an attempt to make the trade partner respond more vigorously to the growing stream of migrants who travel from Central America through Mexico and enter the US illegally. Still, it's below last year's pace of 225,000. Those jitters could explain why hiring has been volatile over the last several months.
Flooding in the central US may have reduced the May payroll number by 40,000 jobs, Hassett said on Bloomberg Television.
MARTIN: Unemployment, though, is still near a 50-year low, so does that mean that workers can expect pay raises?
"We may have reached a peak in hiring", Peter Cardillo, chief market economist at Spartan Capital Securities, told The Post, adding that Friday's data "renewed hopes that the Fed is likely to cut". A lack of wage pressure indicates that employers aren't as desperate for workers as they often say they are.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) traded in the same direction as stocks, though gains were limited to a few percentage points.