WASHINGTON, June 6 (Reuters) – U.S. job growth slowed in May amid uncertainty about the Trump administration’s import tariffs, but solid wage growth should keep the economic expansion on track and potentially allow the Federal Reserve to delay resuming its interest rate cuts.
The ebbing labor market momentum reported by the Labor Department on Friday was underscored by sharp downward revisions that showed 95,000 fewer jobs were added in March and April than previously estimated over the two month period.
The unemployment rate held steady at 4.2% for the third consecutive month because 625,000 people dropped out of the labor force, suggesting a lack of confidence in the jobs market and offsetting a decline in household employment. Recent surveys have pointed to consumers becoming less optimistic about their prospects of finding a job in the event of being laid off.
Economists say President Donald Trump’s flip-flopping on import tariffs has hampered businesses’ ability to plan ahead and hire more workers. Opposition to Trump’s tax-cut and spending bill from conservative Republicans in the U.S. Senate and tech billionaire Elon Musk has added another layer of uncertainty for companies.
