Payrolls grow slowly in May - East Valley Tribune: Business

Payrolls grow slowly in May

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Posted: Saturday, June 4, 2005 6:37 am | Updated: 10:13 am, Fri Oct 7, 2011.

WASHINGTON - Job growth slowed nearly to a crawl in May, with new hiring registering the smallest gain in almost two years. The unemployment rate dipped to a low 5.1 percent, however.

The latest employment snapshot, released by the Labor Department on Friday, kept up the recent pattern of choppy job creation. Employers boosted payrolls by just 78,000 after a hiring spurt of 274,000 in April.

Economists offered a variety of reasons for May’s moderation: The toll of high energy prices squeezing bottom lines, companies reducing production to work off excess goods on shelves and backlots, cool weather and a statistical payback after the strong job figures in April.

Job cuts last month were reported in categories including manufacturing, leisure and hospitality, accounting and bookkeeping and temporary help. Those losses tempered gains elsewhere.

For now, some economists don’t see the slower job growth of May as a sign that the economy is sliding back into a soft patch. Others aren’t so sure.

The lackluster job growth performance, however, does raise the odds that the Federal Reserve may slow — or soon end — its yearlong campaign to tighten credit, many economists agreed.

Despite the slow growth in payrolls, the civilian unemployment rate actually declined fractionally last month — to 5.1 percent. That was down a notch from April’s 5.2 percent jobless rate and was the lowest overall since September 2001.

‘‘You have both a bit of sweet and a bit of sour in the report,’’ said Mark Zandi, chief economist at Economy.com.

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