Business

Only 138,000 new jobs in the US last month

WASHINGTON: US job growth slowed last month and employment gains in the prior two months were not as strong as previously reported, suggesting the labour market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 per cent.

Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labour Department said yesterday.

March and April data was revised to show 66,000 fewer jobs created than reported. May's job gains marked a sharp deceleration from the 181,000 monthly average over the past 12 months.

While May's job gains could still be sufficient for the Federal Reserve to raise interest rates this month, the modest increase could raise concerns about the economy's health after growth slowed in the first quarter.

The unemployment rate fell one-tenth of a percentage point to its lowest level since May 2001. The drop came as people left the labour force. The smaller and more volatile survey of households also showed a drop in employment.

The report was released less than two weeks before the Fed's June policy meeting.

Economists had forecast payrolls increasing by 185,000 jobs last month and the unemployment rate holding steady at 4.4 per cent.

Minutes of the Fed's May 2-3 policy meeting, which were published last week, showed that while policymakers agreed they should hold off hiking rates until there was evidence the growth slowdown was transitory, "most participants" believed "it would soon be appropriate" to raise borrowing costs. - REUTERS

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