WASHINGTON - U.S. hiring stumbled in May as employers added just 75,000 jobs, a sign that businesses have become more cautious in the face of weaker global growth, widening trade conflicts and perhaps some difficulty finding enough workers.
Last month's modest job gain followed a much healthier increase of 224,000 in April. The Labor Department said Friday that the unemployment rate remained at a nearly 50-year low of 3.6%.
The tepid job growth, along with rising pressures on the economy, makes it more likely that the Federal Reserve will cut rates in the coming months. Bond yields fell after the jobs data was released, signaling expectations for lower Fed rates. Stock investors, too, signaled their approval, with the Dow Jones Industrial Average up nearly 300 points in late-day trading.
At the close of trading Friday, the S&P 500 index rose 29 points, or 1.1%, to 2,873. It was the index's best week since late November.The Dow Jones industrials rose 263 points, or 1%, to 25,983. The Nasdaq gained 126 points, or 1.7%, to 7,742.On Friday, the government also revised down the economy's hiring gains for March and April by a combined 75,000. In the first five months of the year, job growth has averaged 164,000 a month, a solid pace that is enough to lower the unemployment rate over time. Still, it's below last year's pace of 225,000.
Last month, President Donald Trump announced an increase in tariffs on $200 billion in Chinese imports from 10% to 25%. And last week, he threatened to impose 5% tariffs on all Mexican imports to the United States beginning Monday. Those taxes would rise each month until they reach 25% in October unless the Mexican government cuts off a flow of Central American migrants entering the United States from through Mexico.
The economy is showing signs of sluggishness just as the expansion has reached its 10th anniversary. Next month, it will become the longest period of uninterrupted growth on records dating to 1854. Yet consumers have turned cautious about spending, and companies are scaling back their investment in high-cost machinery and equipment.
Economists cautioned that May's job figures cover just one month and that broader trends indicate that hiring remains steady. They also noted, though, that May's weaker hiring data preceded Trump's threat last week to impose 5% tariffs on Mexico. So the full impact of the trade fights will likely show up in coming months.