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Growth in jobs slows in May

WASHINGTON - For jobseekers, bosses and investors, the monthly ups and downs of the nation's employment figures are like riding a jerky roller coaster.

The latest report, released by the Labor Department on Friday, showed job growth slowed nearly to a crawl in May. But the unemployment rate dipped to 5.1 percent.

The recent pattern of choppy job creation continued. Employers boosted payrolls by 78,000 after a hiring spurt of 274,000 in April. May's job gain was the weakest in almost two years.

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

Job cuts were reported in categories including manufacturing, leisure and hospitality, accounting and bookkeeping and temporary help. Those losses tempered gains in retail, construction, education and health care.

Some economists don't see the slower job growth of May as a sign the economy is sliding back into a soft patch. Others aren't so sure.

The lackluster job growth performance, however, does raise the odds 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 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 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.

The employment report often offers seemingly conflicting pictures of what is happening in the labor market because figures are based on two statistical surveys. And there clearly was a mismatch between the two surveys in Friday's report.

The unemployment rate is calculated on the basis of a survey of 60,000 households, sort of a poll of the jobs market. That survey indicated 376,000 people said they found employment last month, outpacing the number of people who couldn't find work.

But economists tend to give more credence to a much broader survey of business payrolls that examines 400,000 work sites. And that's the one that showed only 78,000 jobs added to payrolls.

[Last modified June 4, 2005, 06:14:28]