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US job engine sputtering

June 3, 2016

The world's largest economy created the fewest number of jobs in more than five years, the Labor Department has reported. Partly to blame was a month-long Verizon strike, which had depressed employment.

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US workers
Image: picture alliance/landov

European stock markets fell and Germany's 10-year sovereign bond yield hit its lowest level this year shortly after the US reported weaker-than-expected jobs data on Friday, prompting investors to scale back hopes for a rise in US interest rates soon.

Non-farm payrolls increased by only 38,000 last month, the Labor Department said in its latest report, marking the smallest gain since September 2010.

Fed Chair Janet Yellen had said monthly gains of roughly 100,000 jobs were needed to keep up with growth in the working-age population.

Taking a look at the US economy

Unemployment rate down

Friday's report showed the protracted Verizon strike had depressed employment growth by 34,000 positions.

The Labor Department pointed out that the goods-producing sector, including mining and manufacturing, shed 36,000 jobs in May, the most since February 2010.

The jobless rate dropped by three-tenths of a percentage point to 4.7 percent in the month under review, reaching its lowest level since late 2007.

hg/nz (Reuters, dpa)