U.S. job growth brakes sharply; unemployment rate falls to 4.7 percent
The U.S. economy created the fewest number of jobs in more than five years in May, hurt by a strike by Verizon (VZ.N) workers and a fall in goods producing employment, pointing to labor market weakness that could make it difficult for the Federal Reserve to raise interest rates.
Nonfarm payrolls increased by only 38,000 jobs last month, the smallest gain since September 2010, the Labor Department said on Friday. Employers hired 59,000 fewer workers in March and April. The government said the month-long Verizon strike had depressed employment growth by 34,000 jobs.
The goods producing sector, which includes mining and manufacturing, shed 36,000 jobs, the most since February 2010.
Even without the Verizon strike, payrolls would have increased by a mere 72,000.
The Verizon workers, who were considered unemployed because they did not receive a salary during the payrolls survey week, returned to their jobs on Wednesday. They are expected to boost June employment.
The jobless rate fell three-tenths of a percentage point to 4.7 percent in May, the lowest since November 2007. The decrease in the unemployment rate was in part due to a people dropping out of the labor force.
The gains in May were broadly weak, with the private sector adding only 25,000 jobs, the smallest since February 2010.
Mining employment maintained its downward trend, shedding 10,000 positions. Mining payrolls have dropped by 207,000 since peaking
in September 2014, with three-quarters of the losses in support activities.
Manufacturing employment fell by 10,000 jobs. The Verizon labor dispute reduced information sector jobs by 34,000.
Retail payrolls rose 11,400 after shedding jobs in April for the first time since December 2014. Temporary help jobs fell 21,000.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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