Job Creation Plummets in May

By Toni Vranjes

June 3, 2016

The Labor Department delivered some bleak news today, revealing that employers added just 38,000 jobs last month, and that payrolls for the previous two months were revised downward.

“Not only was May itself weak, but there is clear evidence that the pace of employment gains has slowed in the past few months,” wrote IHS Chief Economist Nariman Behravesh in an analysis.

For March and April combined, the government revised job growth downward by 59,000. The industries that shed jobs include construction, which was down by 15,000; and manufacturing and mining, which each lost 10,000 jobs.

Meanwhile, unemployment dropped from 5 percent to 4.7 percent, driven by a labor-force decline of 458,000.

But Behravesh emphasized that it’s important to examine the May job numbers in the broader context.

“Notwithstanding the weakness in the payroll data, it is important to note that other indicators (initial unemployment claims, layoffs, and the Fed’s Beige Book on regional conditions) all point to continuing tightness in the labor market,” he wrote.

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