Job seekers work on their resumes during an employment fair in Dallas, Texas earlier this month. (AP Photo)
WASHINGTON: US employers pulled back on hiring in May by adding only 138,000 jobs. But hiring was still enough to keep pushing unemployment lower.
The Labor Department said on Friday that the unemployment rate fell to 4.3% from 4.4% in April. Job gains have averaged 121,000 a month over the past three months, a deceleration from an average of 181,000 over the past 12 months.
Average hourly earnings have risen by just 2.5% over the past year.
Restaurants and healthcare firms posted solid job gains. Food services added 30,300 workers, while healthcare contributed 24,300 jobs. Construction added 11,000 jobs.
But manufacturers, retailers and governments shed workers last month.
Despite the slowdown in job growth, the US economy is running neither too hot nor too cold, with growth holding at a tepid but far from recessionary 2% annual rate. Few economists foresee another downturn looming, in part because the recovery from the recession has been steady but grinding, with little sign of the sort of overheated pressures that normally trigger a recession.
The government’s monthly jobs report produces a net gain by estimating how many jobs were created and comparing that figure with how many it estimates were lost. If hiring maintains its current pace, it would exceed population growth, and the unemployment rate should eventually fall even further below its current 4.3%, a level associated with a healthy economy.
There are encouraging signs that jobless people who had earlier given up hope of working are now being hired. That points to a strengthening economy despite weak growth during the first three months of the year.
But the influx of job seekers can also be a drag on pay growth. As more people start seeking jobs, employers begin to have less incentive to raise pay. It’s only when employers face a shallow pool of job applicants that they tend to feel compelled to raise pay in hopes of hiring people who fit their needs.
Annual growth in average hourly earnings has been weak in recent months. And whatever meaningful pay raises that exist are going disproportionately to managers and supervisors.
Many of the jobs that have been added over the past year are in the generally lower-paying leisure and hospitality industry — hotels, restaurants and amusement parks.
The Trump administration has designated the pace of hiring for good-paying skilled jobs in construction, manufacturing and mining as among the categories it monitors for economic health. Hiring in those three sectors has been comparatively sluggish over the past year.