Published: Fri, June 07, 2019
Finance | By Loren Pratt

Companies add fewest jobs in 9 years in May

Companies add fewest jobs in 9 years in May

On Friday, Americans will get a better picture of the jobs market when the Labor Department releases its monthly jobs report for May.

US employers added just 27,000 workers to payrolls last month, the ADP Research Institute reported Wednesday. A recent string of weak reports on retail sales, factory orders and home purchases indicate growth is slowing as the trade war weighs on businesses.

"Labor shortages are impeding job growth, particularly at small companies, and layoffs at brick-and-mortar retailers are hurting", says Mark Zandi, chief economist at Moody's Analytics.

USA stock futures careened lower in the pre-market session but have quickly recovered.

The ISM said 16 industries, including utilities, real estate, finance and insurance, healthcare and social assistance, information, and professional, scientific and technical services reported growth last month.

All of the major goods producing categories reported losses, with natural resources and mining down 4,000 and manufacturing off by 3,000.

Markets are betting that the Federal Reserve steps in with at least two and possibly three rate cuts this year.

The ADP report stoked a buying frenzy in the gold market, as traders snatched up bullion in large numbers.

ADP data are released 48 hours in advance of the official nonfarm payrolls report.

"We are closely monitoring the implications of these developments for the USA economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective", Powell told a monetary policy conference in Chicago on Friday.

Last month's jump in hiring by services sector businesses suggested that a sharp slowdown in private payrolls growth in May shown in another report on Wednesday was probably a fluke. A weaker global economy and fading stimulus from the Trump administration's tax cuts is dragging on the USA economy.

The goods-producing sector lost 43,000 positions, while the service-providing sector gained 71,000. Consensus economists are expecting that 180,000 new non-farm payrolls and 175,000 private payrolls were added in May. CNBC's Rapid Update survey forecasts gains of just 1.7% in the second quarter. The construction industry lost the most with 36,000 jobs.

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