The U.S. economy added only 38,000 private, non-farm payroll positions in May, according to the latest monthly employment report from the Bureau of Labor Statistics, released Friday morning. The seasonally adjusted figure is down 69% from the downward-revised 123,000 jobs added in April, and is down -86% from the 273,000 jobs reported a year prior.
The results fall significantly short of economists expectations, including the 160,000 estimate by Moody's Analytics chief economist Mark Zandi that BUILDER reported earlier this week, the 170,000 anticipated by Dow Jones, and the consensus among economists surveyed by Bloomberg of 158,000.
The national unemployment rate now stands at 4.7%, a 30 basis point dip from April. The number of long-term unemployed (27 weeks or more) declined by 178,000 to 1.9 million in May and accounted for 25.1% of the unemployed. The civilian labor force participation rate decreased by 0.2 percentage points to 62.6%, pushing the rate down 0.4 percentage points during the past two months, offsetting gains in the first quarter. The employment-population ratio, at 59.7%, was flat. The number workers of involuntary part-time workers jumped by 468,000 to 6.4 million.
Attention now turns to the Federal Reserve, which this month is contemplating a rise in its benchmark interest rate, a difficult decision in the wake of this jobs report.
"It makes it a lot tougher for the Fed, clearly. It now puts them in an awkward position of having to justify higher rates into a slowing job market," Natixis Global Asset Management chief market strategist David Lafferty told CNBC. "I don't think history would look very favorably on that."
May numbers were skewed by the strike of 35,000 employees in the telecom industry, which helped knock the information category down by 34,000 jobs. Health care, as usual, led jobs added with 46,000 in May; health care employment has increased by 487,000 during the past year.
Employment in the construction industry dropped -15% month-over-month, largely due to the -8.2% drop in heavy and civil engineering construction employment, and the -6.3% drop in jobs related to the construction of buildings. The -6.3% drop month-over-month impacted employment related to construction of nonresidential buildings most significantly (a -5.1% drop), while jobs related to the construction of residential building dropped only -1.2%.
Within manufacturing, employment in durable goods declined by 18,000 in May, with job losses of 7,000 in machinery and 3,000 in furniture and related products. Mining employment continued to decline (-10,000). Since reaching a peak in September 2014, mining has lost 207,000 jobs.
The average non-farm workweek held at 34.4 hours in May. Average hourly earnings for all employees by five cents to $25.59, following an increase of nine cents in April. Over the year, average hourly earnings have risen by 2.5%.
The change in total nonfarm payroll employment for March was revised from +208,000 to +186,000, and the change for April was revised from +160,000 to +123,000. With these revisions, employment gains in March and April combined were 59,000 less than previously reported. Over the past 3 months, job gains have averaged 116,000
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