Donald Trump has a new crisis on his hands.
Despite a campaign pledge to create millions of jobs, US employment growth is actually slowing rather worryingly, particularly given a Federal Reserve that seems bent on raising interest rates.
Just as enough time has passed that one can begin to associate the economy with his stewardship, the Labor Department has released a rather grim report showing just 138,000 were created in May.
Worse yet, downward revisions to the prior two months erased another 66,000 net jobs from the 3-month count, meaning job growth in the last quarter was just 121,00 per month. February produced just 50,000 new jobs.
- Bureau of Labor Statistics
Average hourly earnings rose 0.2%, pointing to a still stagnant wage outlook for workers. Treasury bonds yields, which move inversely to their price, darted lower, reflecting rising economic uncertainty.
— Joe Weisenthal (@TheStalwart) June 2, 2017
The only silver lining in the report was the unemployment rate, which is drawn from a separate survey and fell to 4.3%, the lowest since 2001.
“It is abundantly clear that we have a ways to go before we reach genuine full employment-where workers including young and old, and workers of all races can fully benefit from the economy,” said Elise Gould, senior economist at the Economic Policy Institute, a liberal think tank in Washington.
“Despite this, the Federal Reserve is widely expected to raise rates when it meets later this month,” she said in a statement. “This would be unfortunate, as the costs of prematurely declaring full employment and slowing the recovery far exceed the costs of waiting to restrain growth and allowing some wage and price inflation.”
On top of the disappointing jobs figures, a separate report pointed to a wider trade gap, which could not only bring down second economic quarter growth but is also anathema to Trump’s stance on trade.
Now let’s watch the president’s Twitter feed for reaction.