Blow to Donald Trump as US jobs growth slows down
The world's biggest economy added far fewer jobs than had been expected in May, according to latest Labour Department figures.
By John-Paul Ford Rojas, Business Reporter
US jobs growth slowed sharply last month, according to closely watched official data, dealing a blow to Donald Trump.
Nonfarm payrolls increased by 138,000, well below the 185,000 figure pencilled in by economists, while numbers for March and April were revised down by a total 66,000.
The figures from America's Labour Department dampened a stock market rally which had seen the FTSE 100 touch its latest record high in earlier trading.
Experts said it was unlikely to derail an expected interest rate hike later this month from the US Federal Reserve – which would be its second this year – though the Fed's later plans looked less assured.
The latest figures also showed wage growth stuck at a relatively sluggish 2.5% though, more positively, the unemployment rate fell to a 16-year low of 4.3%.
Minutes of last month's Federal Reserve policy meeting showed rate-setters agreed to hold off raising interest rates in the world's biggest economy until they could be sure that a slowdown in growth seen in the first quarter was "transitory".
But most agreed that a hike would "soon be appropriate".
A US rates hike has global repercussions because of its effect on the cost of dollar borrowing, especially in developing nations.
Mr Trump has made protecting American jobs a centrepiece of his presidency.
The slowdown comes as he faces worldwide criticism over his withdrawal from the Paris climate change accord on the grounds that the agreement represents a threat to those jobs.
Paul Diggle, senior economist at Aberdeen Asset Management, said the weak job reading was unexpected but "isn't a disaster".
He said: "Today's job number probably won't stop the Fed from raising rates. But they might well influence what happens next.
"If wage growth doesn't improve, the Fed is going to want to soften its stance on how many rate rises are to come this year and next."
In London, the FTSE 100 had climbed more than 50 points to touch a new all-time high of 7599 earlier in the session, but the steam later came out of the rally and it was dampened further by the US figures.
- Donald Trump