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An applicant for a job at a job fair in Denver, USA, May 9, 2016. The US economy created in May, the fewest jobs in more than five and a half years, and the level of employment in the sectors of manufacturing and construction fell sharply, in a setback labor market complicates the possibility that the Fed will raise soon interest rates. REUTERS / Rick Wilking (reuters_tickers)
by Lucia Mutikani
WASHINGTON (Reuters ) – the US economy created in May, the fewest jobs in more than five and a half years, and the level of employment in the sectors of manufacturing and construction fell sharply, in a setback labor market complicates the possibility that the Fed will soon raise interest rates.
nonfarm payrolls increased by only 38,000 jobs last month, the smallest increase since September 2010, the labor Department said Friday. The additions were affected by a strike by one month Verizon workers, which reduced payrolls in the computer industry 34,000 jobs.
Employers hired in March and April 59,000 fewer workers than reported initially, which he highlighted the weakness of the report. The unemployment rate, meanwhile, fell in May by three percentage tenths, to 4.7 percent, the lowest level since November 2007, due in part to people who left the labor force.
“this is not a good report and will surely lead to Fed officials to rethink whether to apply an increase in interest rates this month or next, as suggested by some lately,” said Peter Ireland, professor of Economics Boston College.
the Federal Reserve said in recent weeks his intention to raise rates soon if job growth continued apace and economic data remained consistent with a rebound in growth in the second quarter.
the Fed president Janet Yellen said last week that if those conditions were met possibly be appropriate increase “in the coming months.” The US central bank raised its interest rate benchmark in December for the first time in nearly a decade.
The shares fell and prices of government debt US rose, while the dollar fell against a basket of currencies after the jobs report.
financial markets virtually ruled out a rise in interest rate on Fed meeting on 14 and 15 June after release data Friday, according Fedwatch. The possibility of an increase in July fell to 36 percent from almost 59 percent expected on Thursday.
Economists polled by Reuters had forecast an increase in nonfarm payrolls in 164,000 jobs and drop in the unemployment rate to 4.7 percent.
the disappointing jobs report sidestepped other reports on consumer spending and industrial production suggest the economy is gaining momentum after a slowdown in growth to 0 , 8 percent in the first three months of 2016 on an annual basis.
in separate reports released Friday, the Commerce Department said exports of goods rebounded strongly in April and orders factories posted their biggest gain in six months.
Some economists said the sharp slowdown in employment last month made up for a boost in hiring due to unusually warm weather in February and March. They also saw the faint rise in payroll as a delayed to lean first quarter growth response.
“Employment sometimes lags behind in economic activity, which means that the weak trend of the first five months of this year simply reflect the dramatic slowdown of the economy in the first quarter, fueled in April and May by a change in some hiring season, “said Chris Low of FTN Financial in New York.
(Published in Spanish by Ana Laura Mitidieri)
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