- 75K jobs created in May, March and April gains revised down by 75K
- Unemployment rate held at 3.6% in May, the lowest in half a century
- Wage gains running at 3.1%, just slightly slower than in April
Today’s labour data showed a disappointing pace of job creation although the unemployment rate remained at a cycle low and wage growth eased very slightly. The weaker showing on employment accompanied other indicators that suggest the US economy is starting to show cracks. Talk of levying tariffs on imports from Mexico on top of increased tariffs on Chinese imports is taking a toll on the US industrial sector and manufacturing employment posted another month of very small gains. Services sector employment increased by 82K, about half the average pace of increase over the past five years. That said, business sentiment in the non-manufacturing sectors continues to hold up. Consumer confidence also improved in May with the cycle low unemployment rate and over 3% wage growth appearing to outweigh consumers’ concerns about the impact of escalating trade tensions. Today’s report hints that the US economy’s momentum may be starting to fray – and if some easing in trade tensions doesn’t emerge the industrial sector will start to look significantly worse.
