US jobs report finds slow hiring despite unemployment drop to 4.7%

Global Business

US Interest Rate-Banks The stock market all but ruling out a summer rate hike after a terrible U.S. jobs report and a wash of other disheartening economic data, the nation’s biggest banks took pummeling from investors Friday, June 3, 2016. (AP Photo/Mark Lennihan)

According to the May jobs report, the United States economy barely grew in the first three months of 2016.  CCTV America’s Jessica Stone has more on what the current report means for the global economy.

US jobs report finds slow hiring despite unemployment drop

US jobs report finds slow hiring despite unemployment drop

Revealed in the Bureau of Labor Statistics monthly report, nearly half a million unemployed Americans stopped looking for work last month, lowering the unemployment rate to 4.7 percent. This as U.S. employers slowed their hiring, adding the fewest number of jobs in over five years, just 38,000. CCTV America's Jessica Stone has more on what the current report means for the global economy.

Revealed in the Bureau of Labor Statistics monthly report, nearly half a million unemployed Americans stopped looking for work last month, lowering the unemployment rate to 4.7 percent. This as U.S. employers slowed their hiring, adding the fewest number of jobs in over five years, just 38,000.

According to Harry Hozer, a professor of public policy at Georgetown University, the drop in unemployment has mixed messages.

“The drop in the unemployment rate sounds good on the surface, but it was all driven by people dropping back out from the labor force. So that’s disappointing as well,” said Hozer.

The Dow, the S&P, and Nasdaq all finished lowered on the day and the U.S. dollar tumbled to a three-week low.

The weak jobs report raises doubts that the U.S. central bank will increase the short-term interest rate at its mid-June meeting. That rate affects the cost of borrowing in dollars.

Federal Reserve Governor Lael Brainard was the first to speak after the employment report’s release. She has urged caution for increasing the interest rate.

“In today’s circumstances, prudent risk management implies there is a benefit to waiting for additional data,” Brainard stated.

But even before the reports’ release, the president of the Federal Reserve Bank of Chicago showed his support for the possibility of two rate hikes this year.

Nonetheless, with slowing growth in China and the prospect of the U.K. leaving Europe, U.S. Central Bankers are balancing softening of the U.S. economy with new doubts about stability around the world.

Next Monday in Philadelphia, U.S. Central Bank Chief Janet Yellen will deliver a speech on the U.S. economic outlook. It may be the last chance for her to signal a position on what the Fed will do with rate hikes at their June 15th meeting.


Tara Sinclair on the May U.S. jobs report

For more on jobs and the economy, CCTV America’s Rachelle Akkufo was joined by Tara Sinclair, chief economist at the job website Indeed.com.