Employers added fewer workers to their payrolls in May than economists had expected. But as Fred Katayama reports, that may not deter the Fed from raising rates in June.
The U.S. economy produced jobs at a slower pace in May. Employers added 138,000 to their payrolls. That was sharply lower than what economists had expected. The previous two months' jobs gains were downwardly revised. The unemployment rate ticked lower to a 16-year-low of 4.3 percent. But the latest numbers suggest the labor market is losing momentum. RBC Capital Markets chief U.S. economist Tom Porcelli said, "This number is not the kind of report that derails the Fed from raising rates in June because you had the resource utilization measures improve, that is, the unemployment and underemployment rate." Adding jobs: hospitals and other healthcare sectors, professional and business services, and restaurants and bars. Cutting payrolls: manufacturing, especially the auto industry, and government. Retail employment shrank for a fourth straight month. Wages grew at a 2.5 percent annual clip. That tepid reading comes as annual inflation rates have recently retreated. The dollar fell on the report. The S&P 500 inched higher at the open.