Job cuts at department and specialty stores contributed to a May employment report that was weaker than expected by economists, but just weak enough to get Wall Street excited.
Total nonfarm payroll employment edged up by just 75,000 positions last month and the unemployment rate remained at 3.6 percent — a 50-year low, the U.S. Bureau of Labor Statistics reported Friday. Wall Street had been expecting a 180,000 gain.
The disappointing growth had stock market investors betting that an interest rate cut that would spur on trading could be in the offing. The Dow Jones Industrial Average rose 1.1 percent, or 290.24 points, to 26,010.90 in midday trading.
Fashion retailers, who have been struggling with a weaker sales and profits than expected, have been tightening up. Employment at department stores dipped by 1,500, while clothing and apparel and accessories stores were down 12,700.
At the same time, March gains were revised down to 153,000 from 189,000, while April’s increase was cut to 224,000 from 263,000.
So far, monthly jobs gains have been much weaker than last year, with an average increase of 164,000 in 2019 and 223,000 in 2018.
Andrew Hunter, senior U.S. economist at Capital Economics, said: “It is another sign that economic growth is slowing. On balance, we still think Fed officials will want to see evidence of more sustained weakness before taking action, but we are increasingly convinced that the Fed will begin cutting interest rates later this year.”