May 2019 Jobs Report: One of the Weakest in This Recovery
The US economy added 75,000 jobs last month, and the unemployment rate was steady at 3.6%.
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.
This month’s jobs growth number was one of the weakest in this recovery. Only eight months had job growth less than what we saw this month, and worth noting that one of those came just a few months ago. While one might expect slower jobs growth at this point in the economic cycle, the context of tariffs and other economic headwinds makes this number more worrisome.
The goods sector (mining and logging, construction, and manufacturing), which is more susceptible to headwinds like tariffs, continued to slow down, reaching year-over-year growth of only 2.1%, which we haven’t seen since the end of 2017. Year-over-year growth in the service sector also ticked down from last month. The service sector includes industries like education and health services, and leisure and hospitality, among others.
Given that the jobs number also came with weak wage growth and an employment rate for workers age 25 to 54 that held steady, workers may soon see that they have gotten all they can get out of this recovery. That being said, this recovery has often surprised us, and so we shouldn’t count it out too soon.