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Commentary By Beth Akers

MI Responds: May 2019 Jobs Report

Economics Employment

The Bureau of Labor Statistics at the Department of Labor has reported that the U.S. economy added 75,000 jobs in May. This reflects a sizable slow-down in job creation relative to the first four months of 2019, which added an average of 164,000 jobs, even considering the downward revisions in this current report for both March and April.

This relatively modest job growth was reflected in an unchanged employment rate of 3.6 percent.

This lackluster report reflects the initial impacts of the new tariff regime between the U.S. and China, which was introduced by the Trump administration in early May. Uncertainty regarding future trade policy, in addition to the actual costs imposed by tariffs, may be making businesses, especially those with exposure to international markets, hesitant to expand employment.

It’s not a surprise that markets reacted positively to this news in the initial moments of trading. Traders are hopeful that this lackluster report will encourage the Federal Reserve to keeps rates low. But the Fed doesn’t craft monetary policy based on a single statistic. The overall labor market is strong and my sense is that any big updates in expectation of Fed policy based on this news would be misguided.

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Beth Akers is a senior fellow at the Manhattan Institute and a former Council of Economic Advisors economist. Follow her on Twitter here.