The U.S. economy added only 75,000 jobs in May amid bite from Trump’s trade war
Hiring dipped in May, the Labor Department reported Friday, as firms cooled off on hiring amid the uncertainty and concern over President Trump escalating the trade war with China.
The U.S. economy added 75,000 jobs in May, a significant pullback from 224,000 jobs added in April that is likely to heighten fears that the trade war is taking a greater toll. The unemployment rate remained at a five decade low of 3.6 percent.
Manufacturing and construction saw anemic job growth in May with less than 5,000 jobs added in each sector, one of the clearest signs that Trump’s tariffs are having a negative impact on blue-collar sectors the president has been trying to boost.
“This looks like an economy that is slowing down, which doesn’t mean that we’re necessarily entering a recession. It does mean that we likely will not have the strength that we had in past years,” said Martha Gimbel, research director for Indeed.com’s Hiring Lab.
Calls are growing for the Federal Reserve to reduce interest rates to counter Trump’s trade moves. Wall Street now sees more than a 75 percent probability the Fed will cut rates by the end of July.
“These data make it easier for the Fed to ease either this month or next,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Auto companies like Ford and GM have repeatedly warned the president that his tariffs on America’s neighbors and on metals are harming the industry and costing billions a year. The president removed metals tariffs on Canada and Mexico in May but is now threatening import duties on all goods coming across the Mexican border, an even more severe and costly move.
“The slowdown is really coming from the sectors that are most susceptible to trade tensions like manufacturing, construction, mining and logging. That does make me worried,” said Gimbel.
May marked the 104th straight month of job gains for the nation, a record streak that has helped many Americans including those with disabilities or criminal histories to find jobs. Many business leaders say finding workers is their top struggle, but they are not raising wages as fast as they were earlier this year.
The average hourly wage grew 3.1 percent in the past year, above the cost of living but well below the 4 percent growth experienced during the economic boom of the late 1990s.
Workers and economists had hoped to see stronger wage gains this summer as unemployment remained low but wage gains appear to be stalling.