US Job Growth Slows in May

According to data from the US Department of Labor’s Bureau of Labor Statistics (BLS), health care and construction firms continued to add personnel in May, while employment in most other industries was little changed. Data released Friday represented the slowest job growth in almost two years and was particularly notable because it followed a significant hiring advance in April of 274,000 new positions, according to the government.

The BLS data showed that following a sizable April gain, leisure and hospitality employment was flat in May.  Employment was also little changed in financial activities and in professional and business services.  Over the last three months, job growth in professional and business services has averaged 18,000 per month, compared with 52,000 per month during the 12 months ending in February. Temporary help services employment was basically unchanged in May and has shown little net growth since October.
  
Employment in the information industry, which increased in April, edged down in May with both the April and May movements in information driven by the motion picture and sound recording industries.
  
In the goods-producing sector, construction employment continued to grow in May (20,000).  Within this industry, a gain of 26,000 jobs among residential specialty trade contractors more than offset a loss of 16,000 among nonresidential contractors.  Job growth in heavy construction continued in May; employment in the industry has increased by 34,000 since its recent low point in February 2004.
  
After rising by 30,000 between October and April, employment in mining was essentially unchanged in May. Manufacturing employment was little changed over the month.  Since August 2004, factory employment has decreased by 67,000.  In May, there were job declines in apparel and in plastics and rubber products.

Despite the slow growth in payrolls, the Labor Department’s latest snapshot of the US jobs picture showed that the civilian unemployment rate actually dipped to 5.1% from 5.2% the month before.

“Clearly there’s some disappointment here,” said Anthony Chan, senior economist at JP Morgan Asset Management, according to news reports.   “But this may be a gift to financial markets and Main Street because the Federal Reserve might not have to be so aggressive in raising rates. In that regard, it is almost a good report.”