Job gains whiff, unemployment rate falls to new post-recession low

The US economy added 138,000 jobs in May while the unemployment rate fell to a 16-year low of 4.3%, according to the Bureau of Labor Statistics.

Economists had forecast 182,000 nonfarm payrolls and a 4.4% unemployment rate, the lowest since 2007, according to a Bloomberg survey.

The unemployment rate fell as participation in the labor force also declined, to 62.7% of people that are either working or job hunting, from 62.9%.

Wage growth was little changed in May. However, economists had expected this because of a calendar quirk: the survey week for the jobs report, which usually includes the 12th of the month, was different from the week of May 15, when many workers get paid and would receive any raises.

Average hourly earnings increased by 0.2% from April, and rose 2.5% year-on-year.

Despite the miss on job gains, this report should provide the final green light for the Federal Reserve. It meets later in June and is expected to raise borrowing costs for the second time this year.