US jobs data escalate fears of double dip
The US economy added just 54,000 new jobs in May, confirming fears that the recovery has hit a soft patch as the unemployment rate ticked up to 9.1 per cent.
Non-farm payrolls rose far less than the 165,000 that economists polled by Bloomberg had expected and were well below the average 220,000 gain in the previous three months, the US labour department said.
The unemployment rate rose by a tenth of a point from 9 per cent in April, disappointing hopes that it would fall back to 8.9 per cent, but the increase was due to an expanding labour pool as more Americans searched for jobs. Out of a workforce of 153.7 million, 13.9 million people are unemployed.
In the face of a rising tide of grim economic reports in recent days, analysts had pared back their estimates for job creation but Friday’s figures were still far worse than all but the most bearish of economists had expected...
The labour department data showed employment in the private sector rose by 83,000, missing expectations of a 170,000 gain and sharply below April’s revised 251,000. The modest rise did offset a 29,000 drop in government payrolls.
Services industries recorded the largest employment gains last month, adding 80,000 jobs, led by the professional and business services and education and health sectors. But retailers, who had added 64,000 positions in April, shed 8,500 jobs in May.
Manufacturing employment fell by 5,000, the first decline since October...
The weakness has extended beyond the labour market, with a pullback in consumer spending dragging economic growth in the first quarter and manufacturers – in recent months the economy’s leading bright spot – reporting a sharp slowdown in growth. Meanwhile the battered housing sector was dealt another blow as home prices fell to their lowest level since 2002 and consumer confidence sagged as Americans fretted over jobs and high (gas) prices.