US job growth falls in May, amid signs of slowing economy

Retail trade and manufacturing lost 41,000 jobs between them in May. Figures for jobs growth in April and March were also adjusted downward, from 138,000 to 126,000 and 200,000 to 175,000, respectively. The official jobless rate fell to 4.6 percent in May, the lowest since July 2001. The latter figure’s significance is unclear, under conditions where millions are either temporarily ‘discouraged’ or have withdrawn permanently from the workforce.

Meanwhile workers’ average hourly earnings rose by only one cent in May and average weekly earnings actually decreased (due to a slowdown in average weekly hours).

Both the jobs growth and the earnings data fell far below the expectations of economic analysts. The median estimate of two dozen economists questioned by Dow Jones Newswires and CNBC had been for an increase of employment in May of 180,000 and a gain in hourly earnings of 0.2 percent. Seventy-nine experts surveyed by Bloomberg forecast a jump in last month’s payrolls ranging from 125,000 to 200,000.

The lower than expected increase in jobs was generally greeted as unfortunate by the media, while the meager gain in wages was hailed as a healthy sign. For those concerned with whether the Federal Reserve will continue to raise interest rates to ‘combat inflation,’ neither figure was displeasing. As TheStreet.com noted, “In several respects, Friday’s report is ideal for stock investors, showing restrained economic growth and contained wage inflation.” However, the numbers on both jobs and wages are further bad news for the working population.

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http://wsws.org/articles/2006/jun2006/jobs-j03.shtml