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Labor Dept. says 75,000 jobs added in May; well short of expectations

By
Nicholas Sakelaris
Construction workers pass the Fearless Girl statue outside the New York Stock Exchange on Wall Street in New York City. File Photo by John Angelillo/UPI
Construction workers pass the Fearless Girl statue outside the New York Stock Exchange on Wall Street in New York City. File Photo by John Angelillo/UPI | License Photo

June 7 (UPI) -- The U.S. economy added 75,000 new jobs during the month of May, the Labor Department said in its jobs report Friday -- far short of expectations.

Analysts had projected about 180,000 new jobs for the month.

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The department's report said employment continued to trend up in professional and business services and healthcare. It noted that unemployment remains at a historically-low 3.6 percent, or just under 6 million Americans.

This week's ADP jobs report for May, which is separate from the monthly Bureau of Labor Statistics report, showed just 27,000 new jobs.

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Some experts, however, note that the ADP report has been largely inconsistent in predicting official government figures. The human resources and payroll firm reported just 129,000 new jobs for March -- a figure that was crushed two days later when the Labor Department reported an addition of almost 200,000 jobs.

In April, payrolls grew by a robust 263,000 while retail sales and manufacturing sent mixed signals. The Labor Department said just 20,000 jobs were added in February, after an explosion in January of more than 300,000 new jobs.

Friday's report said the monthly average gain so far this year is 164,000 -- a ways off the 2018 average of 223,000 new monthly jobs.

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Experts said the Federal Reserve may seriously consider cutting interest rates if the job numbers don't meet expectations, and Friday's sluggish figures were far short. The Fed will meet again for its next two-day policy meeting June 18. It hasn't raised, or cut, the interest rate target range at any meeting so far this year.

"There's clearly been a shift in Fed rhetoric," chief economist at Natixis Joseph LaVorgna told CNBC. "What's interesting about the employment report is it raises the chance that the Fed could move.

"If you look at the Fed funds market, it's pricing roughly a 20 percent chance of a June cut ... The reason it's not higher is because the bond market knows that ADP is at best a very inconsistent predictor of employment."

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Fed Vice Chair Richard Clarida said last month that the central bank had cut rates preemptively, or made an "insurance" cut.

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