US job growth slows in May
WASHINGTON: US job growth slowed in May amid headwinds from tariff uncertainty, while the unemployment rate held steady at 4.2 per cent, potentially giving the Federal Reserve cover to delay resuming interest rate cuts for a while.
Nonfarm payrolls increased by 139,000 jobs last month after rising by a downwardly revised 147,000 in April, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday.
Economists polled by Reuters had forecast 130,000 jobs added after a previously reported 177,000 rise in April. Estimates ranged from 75,000 to 190,000 jobs. The unemployment rate remained at 4.2 per cent for the third straight month.
The economy needs to create roughly 100,000 jobs per month to keep up with growth in the working age population. That number could decline as President Donald Trump has revoked the temporary legal status of hundreds of thousands of migrants amid an immigration crackdown.
Much of the job growth this year reflects worker hoarding by businesses amid Trump's flip-flopping on tariffs, which economists say has hampered companies' ability to plan ahead. Opposition to Trump's tax-cut and spending bill from hardline conservative Republicans in the US Senate and billionaire Elon Musk adds another layer of uncertainty for businesses.
Employers' reluctance to lay off workers potentially keeps the US central bank on the sidelines until the end of the year. Financial markets expect the Fed will leave its benchmark overnight interest rate unchanged in the 4.25 per cent-4.50 per cent range this month, before resuming policy easing in September.
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