The U.S. added just 38,000 jobs in May, a statement from the Bureau of Labor Statistics confirmed Friday.
That figure badly missed the expected increase of about 160,000 jobs. In addition, revisions from the past two months of reports subtracted another 59,000 jobs. These show that the economy hasn’t grown much at all in the past few months.
The unemployment rate is down to 4.7 percent. That may initially seem positive, but it comes mostly from people dropping out of the labor force after deciding to give up on their search for a job. The labor force participation rate fell 0.2 percent in May to 62.6 percent, erasing some of the gains that it had made previously this year.
There is a tiny bit of good news in the report: the Verizon strike, which ended this week, accounted for 35,000 job “losses” this month. That’s because those workers wouldn’t be counted as employed while they were on strike over their dispute with Verizon, which owns AOL, The Huffington Post’s parent company. Even so, adding those workers back into the labor force still doesn’t make this month’s number look very good.
On the pay front, the increase in average hourly earnings is plodding along. After a 9-cent jump in April, the rise this month was a mere 5 cents. The increase makes the average hourly wage now $25.59, up 2.5 percent on an annual basis. That’s fine, but not great.
This report might have an effect on the Federal Reserve’s decision on when its next interest rate rise will be. Fed chair Janet Yellen said in a speech last week that a rate increase may be coming in the next few months “if the labor market continues to improve.” The Fed is hard to read, but this figure certainly doesn’t count as much of an improvement.
The market does not seem to expect an increase in June after Friday’s report.
University of Michigan economist Justin Wolfers, who almost always has something good to say about the jobs report, had nothing this month.
Unsurprisingly, presumptive Republican presidential nominee Donald Trump didn’t think much of the report, either.
This article has been updated with additional details and quotes reacting to the release of the May jobs report.
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