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American unemployment hits its lowest in 16 years

Photo: Getty Images

NEW YORK CITY — The US economy added 138,000 jobs in May while the unemployment rate fell to a 16-year low of 4.3%, according to the Bureau of Labour Statistics.

Economists had forecast 182,000 nonfarm payrolls and a 4.4% unemployment rate, the lowest since 2007, according to a Bloomberg survey.

The unemployment rate fell as participation in the labour force also declined, to 62.7% of people that are either working or job hunting, from 62.9%.

Wage growth was little changed in May. However, economists had expected this because of a calendar quirk: the survey week for the jobs report, which usually includes the 12th of the month, was different from the week of May 15, when many workers get paid and would receive any raises.

Average hourly earnings increased by 0.2% from April, and rose 2.5% year-on-year.

Despite the miss on job gains, this report should provide the final green light for the Federal Reserve. It meets later in June and is expected to raise borrowing costs for the second time this year.

Retail trade lost 6,100 jobs, and the majority were in large department stores. Up to 3,000 stores are expected to close this year as more consumers choose to shop online.

More to come …

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