What's going on?
Friday’s jobs report showed that the US added just 75,000 jobs in May – less than half the number expected.
What does this mean?
The healthcare sector nursed 16,000 new jobs, and professional and business services (like lawyers and researchers) added 33,000. Jobs in retail, manufacturing, and working for Uncle Sam didn’t grow by much – nor did those in construction, breaking for a Ploughman’s lunch after building over 215,000 new roles in the last year. Average wages grew 3.1% higher than the same time last year – slower than in April and shy of forecasts. This probably wasn’t a total surprise: data on Wednesday showed that the private sector added only 27,000 jobs in May – the fewest since 2010 and well below the 185,000 expected.
Why should I care?
For markets: Get to work, Fed.
US employers have added an average of 164,000 jobs per month in 2019, compared to 223,000 last year. And the slowest rate of hiring in three months may suggest the economy is now losing steam (tweet this). With the unemployment rate at a 50-year low, wage growth should be speeding up rather than slowing down as companies usually boost remuneration to lure workers from their current jobs. It’s the US Federal Reserve’s job to keep both inflation and employment stable; Friday’s data may bolster most investors, who think the Fed will now lower interest rates to sustain economic growth.
For you personally: It’s not all about the money.
US job confidence is at an all-time high – although job availability is now perhaps low. That could be down to a mismatch between what companies are offering and what workers want: millennials, for example, value flexibility over money. And several employees – 48% of baby boomers and 30% of millennials – care more about a job’s purpose than its paycheck, which might also partly explain lower-than-expected US wage growth.