A dramatic slowdown in job creation for May came as a surprise. Only 75,000 new jobs were created when the expectation was for 180,000. Also, they revised downward by 75,000 total jobs for the previous two months. However, the unemployment rate remained steady at a 50-year low of 3.6% with hourly wages year-over-year up 3.1%, in line with the expert’s expectations.
The stock market liked what it saw. Not much damage to the unemployment rolls but a report that looks to support the argument that the FED should reduce interest rates, something investors find comforting.
The important question is; will this weakening job market slow the economy more than it already has slowed and will that mean we will fall into a recession? No one has that answer, but it is a worry. At the very least we will see a weaker second quarter than the first in our GDP numbers.
The yellow flags are out and waving on our economy.