The weak jobs report could give the Federal Reserve another reason not to raise interest rates in June. Fred Katayama reports.
A stunningly weak jobs report. The U.S. economy added just 38,000 jobs in May. That's the smallest in more than five years and far shy of the number expected. Those May gains could have been greater were it not for the massive month-long strike by workers at Verizon. But even without the strike, payroll gains would still have fallen way short of economists' targets. What's more, the previous two months' jobs gains were revised sharply downward. The unemployment rate fell sharply to 4.7 percent but for the wrong reason. Fewer people went looking for jobs. The job losses were broad-based. Sectors losing the most: information due to the Verizon strike, construction, mining and manufacturing. The few sectors adding jobs included health care, retail, and professional services. Wages, which Fed officials watch closely, made small gains in May. The weak jobs report could give Fed chair Janet Yellen another reason not to raise interest rates in June. Analysts already expecting the central bank to hold them steady because Britain's vote on leaving the EU comes after the Fed's meeting. Georgetown professor Harry Holzer: SOUNDBITE: HARRY HOLZER, PROFESSOR OF PUBLIC POLICY, GEORGETOWN UNIVERSITY, (ENGLISH) SAYING "The jobs numbers this month, last month are disappointing, that alone might give her pause. It might make her wait a little longer to start raising rates." Treasury yields spiked higher after the report. Fed officials next meet in mid-June to discuss interest rates.