Friday's US jobs report for May likely to show steady gains

The Labor Department said Friday that the jobless rate fell to 4.3 percent the lowest level since 2001, from 4.4 percent.

The U.S. added 138,000 new jobs last month, according to the Labor Department's May employment report.

"Despite a tightening in the labor market, wages don't seem to be picking up, and that's kind of hard to explain", said Andrew Chamberlain, the chief economist at Glassdoor. In a note on Thursday, Ian Shepherdson, an economist at Pantheon Macro, noted that this left open the chance for wage gains to miss consensus and perhaps fall to as low as 2.4% year-on-year, which would be the lowest print since February 2016.

He noted the job creation was almost three times what was needed to absorb new entrants into the labor force and predicted that, "increasingly, businesses' number one challenge will be a shortage of labor". The government also revised down Friday its estimate of job growth in March and April by a combined 66,000.

Total nonfarm payroll employment rose by 138,000 in May, a decrease from April's downwardly revised figure of 174,000, according to the Bureau of Labor Statistics. Workers generally enjoy higher incomes once they generate more value per hour on the job.

Minutes of last month's Federal Reserve policy meeting showed rate-setters agreed to hold off raising interest rates in the world's biggest economy until they could be sure that a slowdown in growth seen in the first quarter was "transitory".

Mr Trump has made protecting American jobs a centrepiece of his presidency. The 4.4 percent level was already the lowest since since 2007, before the recession hit.

"We suspect there is only limited scope for the prime age participation rate to keep rising", said Michael Pearce, a USA economist at Capital Economics in NY. Over the past three months, job gains have averaged 121,000 per month, which is still considered as a healthy pace by many economists. Consistent with the ADP ADP report was significant growth in new Construction jobs.

While the drop in the jobless rate in May looks like good news, it also reflects the fact that some workers left the labor force, with the closely-watched labor force participation rate falling 0.2 points to 62.7 percent.

S&P 500 futures pared gains after the monthly United States jobs report showed weaker-than-expected hiring and wage growth.

"The wage component of the report continues to serve as a damper, in the sense that it remains subpar for an economy widely regarded as being close to full employment", Hamrick said.

The unemployment rates for adult men (3.8 percent), adult women (4.0 percent), Asians (3.6 percent), blacks (7.5 percent), Hispanics (5.2 percent) and teenagers (14.3 percent) showed little or no change.

Nonstore retailers, including online merchants, hired 2,900 workers last month. Manufacturing payrolls fell by 1,000. Among this group, 355,000 individuals were considered discouraged-not now looking for work because they believe no jobs are available for them. Healthcare and social assistance providers increased their payrolls by 32,300 after a 44,900 gain in April.

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