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US jobs growth in shock May slowdown

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The US economy created far fewer jobs than expected last month and wages also rose less than forecast.

Some 75,000 jobs were created in May rather than the 185,000 expected by analysts, the Bureau of Labor Statistics said.

The dollar dropped as markets assumed that the slower-than-expected job growth meant a rate cut by the US Federal Reserve was more likely.

But the US unemployment rate remained at 3.6%, its lowest level for 50 years.

The US dollar fell more than 0.4% against the pound, the euro and the yen after the jobs figures were published.

“While the US jobless rate remains at its historic low of 3.6%, far fewer jobs are being created and wage rises are modest,” said David Lamb, head of dealing at Fexco Corporate Payments.

“Add a weakening economy to the absence of inflation and the conventional answer is an interest rate cut,” he added.

“While few expect the Fed to cut rates this month, the likelihood of a July cut has risen sharply – and as a result the greenback has swooned.”

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