May Jobs Report: 138000 More On Payrolls; Unemployment Dips Slightly

Some 138,000 jobs were added to the US economy in May, according to the monthly jobs report released by the Bureau of Labor Statistics Friday morning.

But the unemployment rate dropped to 4.3 percent in May - its lowest level since May 2001.

But manufacturers, retailers and governments shed workers last month. Average hourly earnings rose four cents or 0.2% in May after a similar gain in April. The margin of error for the jobs report is also substantial, and the figure is sometimes revised significantly in following months. Over the past three months, job gains have averaged 121,000 per month, which is still considered as a healthy pace by many economists. Economists surveyed by Bloomberg say that growth could tick up slightly in May, to an annual increase of 2.6 percent.

One unusual characteristic of today's job market is that the unemployment rate keeps falling even as hiring has slowed. "That's forcing them to increase compensation to stay competitive and hire temporary workers, but they are still having a hard time increasing prices to absorb the additional costs".

Two days after that meeting, the Labor Department reported that job growth had rebounded strongly in April. Healthcare and social assistance providers increased their payrolls by 32,300 after a 44,900 gain in April.

Employers added a weaker-than-expected 138,000 jobs in May, undershooting forecasts of around 180,000. "These continued improvements have real impact on the lives of American families, as more people take home a paycheck". The rate is near the lowest level in since the 1970s, a time when women were entering the labor force in larger numbers. The White House is preparing for a fight over raising the federal debt limit and approving government funding that, if not resolved, could rock the U.S. economy and global stock markets and cause the Fed to put its plans on hold.

Among the major worker groups, the unemployment rate for Whites edged down to 3.7 percent in May. Workers generally enjoy higher incomes once they generate more value per hour on the job.

Congress is already trying to pass comprehensive health care reform, with the Senate expected to write its own bill.

Some economists said things are finally slowing down after three straight years of growth.

The growth rate of US has slowed down in the month of May and, the employment gains are not as strong as prior two months like previously reported. Fed officials approved similar hikes in December and March after hoisting rates just once the previous decade.

The Federal Reserve is widely expected to raise rates in June, but will likely move quite gradually from there, waiting for signs the labor market is picking up again.

Still, the middling job growth will likely still be enough to prompt the Federal Reserve to raise interest rates when the Board of Governors meets later this month.

The figure, which is often seen as a gauge of economic health, is particularly important in the current recovery because the high rate of retiring baby boomers is pulling the overall participation rate down to a level last seen in the late 1970s.

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