U.S. economy creates a scant 38,000 jobs in May; report may sway Fed interest rate decision

The L.A. Times reports:

U.S. employers drastically slowed their hiring in May, adding just 38,000, the fewest in more than five years and a sign of concern after the economy barely grew in the first three months of the year.

At the same time, the unemployment tumbled to 4.7%, from 5%, the Labor Department said Friday in its monthly unemployment report. The rate, its lowest point since November 2007, fell for a problematic reason: Nearly half a million jobless Americans stopped looking for work and so were no longer officially counted as unemployed.

The much weaker than expected jobs report will raise doubts that the Federal Reserve will increase the short-term interest rate it controls at its next meeting in mid-June or perhaps even at its subsequent meeting in late July. Many analysts had expected an increase by July.

The government has estimated that the economy grew at just a 0.8% annual rate in the January-March quarter.

Obama's dismal economy.