Gold His 4-Week Highs After Lousy Jobs Report

May jobs report 4 things to know

The U.S. economy added 138,000 new jobs in May, according to the jobs report released by the Bureau of Labor Statistics Friday.

In May, employment in professional and business services continued to trend up (+38,000). "Notably, the three-month moving average gain has steadily declined from about 200,000 in February to 121,000 in May". The 24,300 new healthcare hires in May boosted total sector employment to 15.7 million.

Average monthly job growth is expected to slow to about 170,000 this year from 180,000 last year and 226,000 in 2015, . A broad measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they can not find full-time employment, fell two-tenths of a percentage point to 8.4 percent, the lowest since November 2007. The labor force participation rate dropped slightly to 62.7 percent. Those people, who would have preferred full-time employment, were working part time because their hours had been cut or they were unable to find a full-time job.

There was some good news in the employment report.

Those people were not in the labor force, wanted and were available for work and had looked for a job at some time during the prior 12 months.

Last month's job gains could still be sufficient for the Federal Reserve to raise interest rates this month. Nonsupervisory wages rose 2.4% last month, from a year earlier. The government has reported that housing starts are up 5.3 percent year-to-date, while construction spending has risen 5.8 percent year-to-date.

To some economists, these trends suggest that the economy is already well on its way to providing some kind of a job for almost all Americans who are willing and able to work.

At their May meeting, Fed officials indicated that they were ready for another small increase if the economy strengthened after a sharp slowdown in growth over the winter that their official policy statement said was "likely to be transitory".

"Not only did payroll growth, at 138,000, come in well below expectations; but job growth in the previous two months was revised downward substantially". March's numbers dropped from 79,000 to 50,000, and April's from 211,000 to 174,000. Economists say the main reason is that the proportion of adults who either have a job or are looking for one has remained unusually low.

Meanwhile, wage growth remained disappointing, with a 0.2 percent bump from last month and 2.5 percent year-over-year increase.

Charles Mills, who works in marketing and sales at Outdoor Landscaping and Design in Pennsylvania, said the economy is probably the best he can recall since the early 2000s before a nationwide real estate bubble burst.

Job growth in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities and government, showed little change over the month. "I'd call the job numbers soft, not weak".

The mixed picture of the labor market could muddy the waters ahead of a Federal Reserve decision on interest rates later this month. If that continues, then we're unlikely to see significant jobs growth for the entire year, and that will create problems all it's own.

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