The numbers: The U.S. created just 75,000 new jobs in May and employment gains earlier in the spring were scaled back, a worrisome turn that points to a slowing economy and is likely to put more pressure on the Federal Reserve to cut interest rates.
The meager gains in May fell far short of the 185,000 MarketWatch forecast, but stocks rose in Friday trades on the assumption that the central bank might act soon. The Dow Jones Industrial Average DJIA, +1.02% jumped 263 points and the S&P 500 SPX, +1.05% also rose. The yield on the 10-year Treasury yield TMUBMUSD10Y, -1.68% fell to a 21-month low of 2.06%.
Hiring slackened off in almost every key segment of the economy and employment fell in retail and government. The pace of wage growth over the past year also slowed.
The news was not all bad. The unemployment rate clung to a 49-year low of 3.6% and a broader measure of joblessness that includes part-time workers, known as U6, dipped to the lowest level in 19 years.
Trade tensions aside, another reason hiring may have tapered off is a growing shortage of skilled labor in the tightest labor market in decades, some economists say. Many companies complain they can’t find people to fill a large number of open jobs.
What happened: Professional-oriented companies added 33,000 jobs, hotels and restaurants boosted payrolls by 26,000 and health-care providers hired 16,000 workers. These have been the three fastest-growing areas of the economy since an expansion began 10 years ago.
Employment was weak everywhere else. Construction companies hired just 4,000 new workers while retailers shed jobs for the fourth straight month.