US non-farm payrolls up by only 75,000 in May
May US non-farm payrolls fell below economists' predictions.
US non-farm payrolls grew by 75,000, according to the US Department of Labour. That statistic falls far below April’s employment report of 263,000 new positions. Economists expected 185,000 jobs to be added in May.
US non-farm payrolls: key figures
| Professional and business services | +33,000 |
| Healthcare | +16,000 |
| Manufacturing | +3000 |
| Retail | -7600 |
Where did non-farm payrolls grow in May?
Professional and business services added 33,000 new jobs. The healthcare industry added 16,000 new positions. Manufacturing jobs only increased by 3000, a likely consequence of businesses being caught in the middle of the US-China tariff war. Retail lost 7600 positions as brick and mortar stores struggle with declining sales.
What are economists saying about May non-farm payrolls?
Charlie Ripley, senior investment strategist for Allianz Investment Management, believes that the latest job report shows that the booming economy is finally slowing down.
‘While much of the attention from investors has been focused on trade disputes and the potential for a slowing economy, today’s disappointing employment report provides further evidence that the end of the business cycle is upon us and economic activity is slowing,’ said Ripley.
While some economists expressed pessimism about May's non-farm payrolls, there was still positive news. The unemployment rate is still low at 3.6%. Brian Coulton, economist at Fitch Ratings, believes that the US economy is still robust.
‘While the slight decline in wage growth will support the [US Federal Reserve’s] patient stance on rates, the average pace of job growth over the last three months (at 151,000) is hardly alarming. It speaks to a slowdown in the domestic economy, but there’s no suggestion of demand falling off a cliff,’ said Coulton.
Will disappointing non-farm payroll numbers influence the Fed?
Ian Shepherdson, chief economist at Pantheon Economics, wrote in an email to clients that the lackluster job numbers may inspire US Federal Reserve chair, Jerome Powell, to cut interest rates. Powell’s recent comments about the Fed possibly taking action to help the US economy is being interpreted as a sign of a future interest rate reduction.
‘These data make it easier for the Fed to (lower rates) either this month or next, if the trade tensions intensify and the stock market drops sharply,’ noted Shepherdson.
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Non-farm payrolls report
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