US jobs market falters
Job growth braked sharply in May and the unemployment rate rose for the first time since June, putting pressure on the Federal Reserve to ease monetary policy further to shore up the sputtering recovery.
The Labor Department report on Friday, which showed employers added a paltry 69,000 jobs to their payrolls last month, the fewest since May last year, is also troubling news for President Barack Obama ahead of November’s elections.
The unemployment rate rose to 8.2 per cent from 8.1 per cent partly because people flocked into the labor market.
Economists polled by Reuters had expected nonfarm payrolls to increase 150,000 and the jobless rate to hold steady at 8.1 per cent.
While unseasonably warm weather, which brought forward hiring into the winter months, has been blamed for the step back in March and April, the latest report hinted at more fundamental weakness in the economy.
“Some had believed that we had decoupled from China slowing and all the problems in Europe, but that seems to be short-sighted,” said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania. “We’re slowing alongside the rest of the world.”
Employers added 49,000 fewer jobs than previously estimated in March and April. The report further eroded confidence, coming on the back of a raft of soft regional factory surveys and a worsening of the debt crisis in Europe.