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Numbers: The United States created only 75,000 new jobs in May and early spring job gains have been reduced, which is worrisome and suggests a slowing economy and increased pressure on the reserve. federal government to reduce interest rates.
Mild gains in May were well below MarketWatch's 185,000 forecasts, but the stock's reaction on Friday will likely depend on Wall Street's decision that the Fed will act soon.
Premarket trade has indicated greater openness to the stock market
DJIA, + 0.71%
SPX, + 0.61%
while the 10-year Treasury yield
TMUBMUSD10Y, -3.02%
dropped to 2.06%.
Hiring eased in almost all key segments of the economy and employment in retail and government dropped. Wage growth over the past year has also slowed.
The news was not all bad. The unemployment rate stands at 3.6%, its lowest level in 49 years, and a broader measure of unemployment, which includes part-time workers and has reached the lowest level since 19. years.
According to economists, the lack of skilled jobs in the smallest job market in decades is partly the reason why hiring may have declined, according to economists. Many companies say they can not find people to fill a large number of vacancies.
Lily: Weak unions, globalization is not to blame for the reduction of the share of workers' income
What happened: Business-oriented businesses added 33,000 jobs, hotels and restaurants saw their payroll increase by 26,000, and health care providers hired 16,000 workers. These three fastest growing sectors of the economy since the beginning of its expansion, 10 years ago.
Employment was low everywhere else. Construction companies hired only 4,000 new workers, while retailers cut jobs for the fourth consecutive month.
The government also cut 15,000 jobs without being stimulated by temporary hiring at the census.
Employment gains for April and March were also reduced by a combined total of 75,000, according to revised figures.
The economy has created an average of 151,000 new jobs in the last three months, up from 238,000 at the beginning of the year.
The slowdown in hiring and the shift to lower paid jobs in social services and hotels seem to have put an end to the large wage gains.
Although the average wage paid to American workers increased by 6 cents to $ 27.83 per hour, the increase over the last 12 months slowed from 3.2% to 3.1%. It peaked at 3.4% earlier this year.
Big picture: The pace of hiring has slowed since the end of last year and, even after the poor May report, the labor market is still healthier than it has been for several decades.
Nevertheless, the economy seems to have been shaken by persistent trade tensions with China and the slowdown in the manufacturing sector. If the labor market or other indicators show further weakness, the Fed would almost certainly reduce interest rates to help support the economy.
Lily: The economy grew at a "moderate pace" in the late spring, but the Fed Beige Book finds it more optimistic
Market reaction: The Dow Jones Industrial Average and the S & P 500 rose for three consecutive sessions after Fed Chairman Jerome Powell signaled his openness to a reduction in US interest rates.
Lily: Fed Bullard says FOMC may have to cut rates soon due to trade wars, low inflation
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