May Jobs Report Shows Worst Job Growth in Six Years

By: Daniel Steingold | June 03, 2016

The long-anticipated May jobs report, released on Friday, was as dismal as most predicted.

The U.S. economy only added 38,000 jobs in May, despite signs that the economy was improving after a disappointing start to the year. This rate of job growth is the lowest on a month-to-month basis since 2010.

While the report did show how unemployment fell from 5 to 4.7 percent, it is believed that this decrease is due to a smaller labor force, as opposed to more individuals finding jobs. Once an individual leaves the labor force, they are no longer considered unemployed when it comes to official statistics.

Many experts believe that the coming months will be much more promising for the economy. During the last few months, many worldwide economic phenomena affected the American market, including low oil prices and the Chinese market slowdown.

However, not all news was bad. Average hourly earnings saw a small uptick to $25.59 in May, and they are up 2.5 percent since last year.

In addition, the long-term unemployment rate, which measures the number of individuals unemployed for 27 weeks or longer, fell to 1.2 percent. This is its lowest rate since August 2008.

It is ultimately believed that the May jobs report may cause the Federal Reserve to postpone any interest rate increases. Seeing the volatility of currency in other countries, such as Britain with their potential Brexit, could also play a role in holding off on any increases.

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