Friday's US jobs report for May likely to show steady gains

Friday's US jobs report for May likely to show steady gains

"The report suggests tomorrow's jobs report will support a June rate hike", said Chris Low, chief economist at FTN Financial in NY. Goldman Sachs says the trend will continue to reduce monthly job gains by about 10,000.

The last time US unemployment dropped below 4 percent was in December 2000. During the past year average hourly earnings have risen by 63 cents, or 2.5 percent. The standard explanation had been that a large number of people had stopped looking for work, so the supply of workers was greater than the unemployment rate indicated. 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 percent, a level associated with a healthy economy.

The biggest manufacturing jobs gains were in machinery (+3,700), fabricated metal products (+3,500), primary metals (+2,900) and transportation equipment (+2,400). Ford Motor Co said last month it planned to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives. But judging by today's response to the job numbers, traders may be having second thoughts about whether the U.S. is at full employment, too. According to that report, job growth was strong among construction firms and in professional and business services.

Total manufacturing employment fell by 1,000 in the month. The number of discouraged workers was 355,000, falling for the fourth straight month.

Job creation in the healthcare sector continued, with 24,000 new positions added.

One puzzle, though, is that the recent decline in the unemployment rate has so far failed to yield better wage growth.

Coal mines added 400 jobs in May.

China will continue with climate pact even if US pulls out
North Korea's government has even signed the deal, and Russian Federation has too, although it has yet to formally ratify it. Withdrawing would leave the United States aligned only with Russian Federation among the world's industrialised economies.

Annual growth in average hourly earnings was a so-so 2.6 percent in April.

Against the background of balanced risks in US economy, Powell expected a total of three rate hikes this year, including the central bank's March rate hike. "There's a real shortage of available workers, especially in skilled trades" such as carpenters and plumbers, said President Ryan Maibach.

And if employers can't find more workers that they might need, they have to raise wages to retain their existing workers.

He said companies are paying close attention to policies introduced by the new Trump administration to assess the potential impact on businesses, but the hiring outlook is "optimistic".

The unemployment rate ticked down a tenth of a percentage point to 4.3 percent, the lowest since 2001. After years of lackluster pay growth and an anemic economic recovery, the jobs turned a corner in 2016. This unseen supply was keeping wages lower. While minimum-wage increases in many states have pushed pay up in those sectors, employment growth in those fields drags on overall wage gains.

"We still believe it is very likely that the Fed will hike later this month".