Time: 4:53 p.m. CEST
The economy in the U.S. created less jobs in more than five years in May, as the numbers of the employment published by the Bureau of Labor Statistics on Friday. The employment in the nonfarm payrolls changed little, only 38,000 jobs as the US Department of Labor states, with increase of the employment in the healthcare.
The numbers suggested that Federal Reserve could not raise the rates. As Reuters reports, “Economists say wage growth of between 3.0 percent and 3.5 percent is needed to lift inflation to the Fed’s 2.0 percent target.”
In a statement to Reuters, Mohamed el-Erian, chief economic adviser at Allianz in Newport Beach, California said, “This unusual jobs report puts the Fed in a tricky position. Disappointing job creation numbers, including adverse revisions to prior monthly estimates, argue for the Fed to remain highly accommodative for now.”
Mining continued to lose jobs , and information sector showed less performance due to a strike. A month-long strike by Verizon (VZ.N) workers declined the numbers in the telecommunication industry as about 35.000 workers were on strike and not on company payrolls during the survey reference period, the job report says. Verizon workers returned on jobs on Wednesday and could boost June employment report.
Other data from the report shows average hourly earnings rose five cents, or 0,2 percent. “That kept the year-on-year rise at 2.5 percent,” the report says. Broadly, the overall job gains in May were weak. Private sector added only 25,000 jobs, manufacturing employment fell by 10,000 jobs and construction payrolls dropped 15,000.
The unemployment rate in May declined by 0.3 percentages to 4,7 with number of persons declined by 484,000 to 7.4 million. The unemployment rate is high for adult men (4.3 percent), adult women (4.2 percent), Whites (4.1 percent), and Hispanics (5.6 percent) declined in May. The unemployment rate for teenagers is (16.0 percent), Blacks (8.2 percent), and Asians (4.1 percent), showed little or no change, the report says.
A broad measure of unemployment that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment held steady at 9.7 percent in May.
After release of the report the Wall Street reacted with the U.S. stock index drops, while the prices for the U.S. government debt rose. Reuters reports, “Short-term interest rate futures jumped. The dollar .DXY was trading lower against a basket of currencies.”