US employers eliminated the fewest jobs in eight months in May, strengthening signs that the recession is easing, while a drop in wage growth offered a warning the recovery may be muted.
Payrolls fell by 345,000, less than forecast, while the unemployment rate hit a 25-year high of 9.4 per
cent, partly because more people joined the workforce to look for jobs, Labour Department figures showed. The annual rate of average hourly earnings growth touched its lowest since November 2005.
"The rate of decline has slowed some, but the losses to date are causing sharp declines in US per capita income," David Malpass, an economist and president of Encima Global in New York, wrote in a note to clients.He predicted a "slow recovery" from the deepest recession in half a century.
Some investors focused on the report's relief from payroll losses that surpassed half a million in each of the previous six months.
The dollar rallied, Treasury yields rose and some traders added to bets the Federal Reserve will raise interest rates this year.
The head of the panel that dates US recessions warned it's still "too early" to call an end to the slump. Americans are spending less and saving more as home values fall and companies continue to cut workforces.
- BLOOMBERG
