Washington, D.C. — The economy added 38,000 jobs in May 2016, and the unemployment rate fell to 4.7 percent, according to the Bureau of Labor Statistics. Center for American Progress Economist Michael Madowitz released the following statement on the May 2016 employment situation figures:
Even with just 38,000 jobs added last month, today’s jobs report signals the 75th straight month of private-sector job growth for the U.S. economy, but that number is well below the average growth of more than 200,000 jobs per month we have seen since March 2015. The headline numbers are moving strongly in opposite directions, which should give officials pause—the unemployment rate fell from 5 percent to 4.7 percent, even as job growth was highly disappointing. Other measures remained consistent with what we have seen lately—average earnings were up 2.5 percent over the past year, showing healthy wage growth, and both the broadest measure of unemployment and the employment-to-population ratio held steady.
The Federal Reserve, which hinted at a possible rate hike this month in its last statement, is a sober body, and we expect that this kind of uncertainty will cause the Federal Open Market Committee members to hold off on a rate hike that was a questionable proposition based on economic fundamentals already. The Fed’s preferred inflation measure grew 1.1 percent, inflation is well below the Fed’s 2 percent target, and there continues to be considerable slack in the labor market.
With uncertainty over the Brexit vote pushing international markets and the U.S. consumer as the major engine driving the global economy, a wait-and-see posture makes even more sense this morning than it has so far this year.
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