Friday, June 4, 2010
June 4 (Bloomberg) — Employers in the U.S. hired fewer workers in May than forecast and Americans dropped out of the labor force, showing a lack of confidence in the recovery that may lead to slower economic growth.
Payrolls rose by 431,000 last month, including a 411,000 jump in government hiring of temporary workers for the 2010 census, Labor Department figures in Washington showed today. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey. Private payrolls rose a less-than-forecast 41,000. The jobless rate fell to 9.7 percent.
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Stocks declined and Treasuries surged on expectations a slowing in the labor market will restrain consumer spending, the biggest part of the economy. Federal Reserve Chairman Ben S. Bernanke said yesterday that unemployment was exacting a heavy toll, showing why economists forecast interest rates will remain low.
“Hiring looks soft,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It does raise some red flags that businesses are still pretty cautious.”
Full story here.