Although Friday's jobs figure fell below estimates, unemployment still stands at 3.6 percent - its lowest level in almost 50 years, and wages ticked up 3.1 percent. But if so, then wages should be rising faster than they are as employers compete for workers.
The U.S. Federal Reserve signaled an open attitude toward rate cuts this week, as factors including the escalating global trade tensions added to the anxiety over the sustainability of U.S. economic expansion.
The technology-heavy Nasdaq, which has powered the last few years of the decade-long bull market, had its own problems as Washington politicians on both sides of the aisle began calling for the investigation and regulation of the FAANG companies: Facebook, Amazon, Apple, Netflix and Google parent Alphabet. Smaller raises, combined with slower hiring, could diminish consumers' willingness to spend in the coming months.
Employers in several industries cut jobs.
USA employers added the fewest workers in three months and wage gains cooled, suggesting broader economic weakness and likely boosting calls for a Federal Reserve interest rate cut as President Donald Trump's trade policies weigh on growth. The construction industry added 4,000 jobs. Historically, the Census Bureau has staffed up in early summer, but the federal government (excluding the Postal Service) only added 1,400 jobs. "One of the economy's only bright spots is finally weakening". Paul McDonald, a senior executive at the staffing firm Robert Half International, said that mobile app developers, data analysts, coders, and senior financial analysts are still typically receiving multiple offers and strong pay gains. He sees irony in Friday's stock bump from a jobs report because the nation is already beyond what is considered full employment.
"It's insane to have a percentage that high", said David Madden, market analyst at CMC Markets. Last year, GM said it would shed 14,000 workers. The company hires software developers in its Sacramento office, and is able to attract employees who are exhausted of the high cost of living in San Francisco. And last week, he threatened to impose 5 percent tariffs on all Mexican imports to the United States beginning Monday.
President Trump recently called for a 5 percent tariff on all products from Mexico to take effect on June 10 and continue until "the Illegal Immigration problem is remedied". Those taxes would rise each month until they reach 25% in October unless the Mexican government cuts off a flow of Central American migrants entering the United States from through Mexico. Factory output fell 0.5% in April, according to a Fed report.
The Fed has hinted at a possible rate cut earlier this week, sending stocks up, despite some worries over the ongoing U.S. With affordable foreign components costing more or becoming unavailable, manufacturing activity in the U.S.is slowing - with some business owners "citing rising concerns over the cost and uncertainty brought on by tariffs".