Partly reflecting the impact of a recent strike by Verizon (VZ) workers, the Labor Department released a report on Friday showing much weaker than expected U.S. job growth in the month of May.
The Labor Department said non-farm payroll employment edged up by just 38,000 jobs in May compared to economist estimates for an increase of about 158,000 jobs.
The much weaker than expected job growth in May reflected the smallest increase in employment since September of 2010.
The job gains in March and April were also downwardly revised to 186,000 and 123,000, respectively, reflecting a net downward revision of 59,000 jobs.
While health care employment showed a notable increase, the mining sector continued to lose jobs and employment in the information sector declined due to the Verizon strike.
The Labor Department said about 35,000 workers were on strike and not on company payrolls during the survey reference period. The Verizon strike was recently resolved.
The report said the unemployment rate still fell to 4.7 percent in May from 5.0 percent in April, although the decrease came as people left the labor force. The unemployment rate had been expected to dip to 4.9 percent.
The drop in the unemployment rate came as the labor force plunged by 458,000 people, while household employment inched up by just 26,000 people.
Meanwhile, the Labor Department also said average hourly employee earnings climbed $0.05 to $25.59 in May. Wages were up by 2.5 percent year-over-year, unchanged from April.
The much weaker than expected job growth is likely to ease recent speculation about the possibility of a near-term interest rate hike by the Federal Reserve.
by RTT Staff Writer
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