US jobs growth tails off in May

BBC NEWS
US jobs growth tails off in May

The US economy created 75,000 jobs in May, considerably below expectations, US Labor Department data shows.

The figure was nearly half April's original figure of 146,000 new jobs, though that was later revised lower.

In separate data, the non-farms payroll brought the US unemployment rate to 4.6% in May, from 4.7% in April.

While the job creation data points to a cooling economy, some economists welcome it because they believe that it makes an interest rate rise unlikely.

'Pressure off'

In recent weeks there has been growing concern from investors that the US might be on the verge of raising interest rates.

"This latest report takes pressure off the Fed to hike rate in June," said Richard Dekaser, chief economist at National City Corp.

In releasing the new data the Labor Department also cut job creation figures for both March and April by a combined 37,000.

The latest data comes after the US released data on 1 June showing a mixed picture of the world's largest economy.

Various US retailers saw May sales beat forecasts, while a separate report showed productivity was higher than initially thought in 2006's first quarter.

However, manufacturing slipped at the same time as unemployment rose.

Many economists believe the US economy needs to create some 150,000 jobs each month in order to keep pace with population growth, economists have estimated.

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http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/5041654.stm