Business Corpus: May Jobs Report Is A Dud; Fed Rate Cut Likely As Dow Jones Futures Gains EbbThe U.S. economy added just 75,000 jobs in May. Dow Jones futures pared gains as the report raised economic concerns. It makes a Fed rate cut more likely. The post May Jobs Report Is A Dud; Fed Rate Cut Likely As Dow Jones Futures Gains Ebb appeared first on Investor's Business Daily.

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The U.S. economy added just 75,000 jobs in May, adding to concerns about a near-term slowdown and putting more pressure on the Fed to cut rates. The unemployment rate held at 3.6%. Average hourly wage growth slowed to 3.1%. Dow Jones futures pared gains after the jobs report as the broad stock market pointed to a slightly higher open.

Wall Street economists expected 180,000 jobs, 3.7% unemployment and 3.2% average hourly wage growth.

After a combined 75,000 downward revision to job gains for March and April, the economy averaged 151,000 new jobs per month over the past three months. That compares to an average gain of 223,000 jobs per month in 2018.

Dow Jones Futures And Treasury Yield Reaction

Ahead of Friday's regular stock market trading, Dow Jones futures rose 0.15% while S&P 500 futures and Nasdaq 100 futures climbed 0.2%, cooling slightly from the jobs report. The 10-year Treasury yield fell to 2.07%.

Before the jobs data, markets were pricing in about 20% odds of a Fed rate cut on June 19 and a 66% chance of a rate cut by July 31.

Is U.S. Economy Strong Enough To Withstand Trade Fights?

The May jobs report offered the last look at the state of the U.S. job market before President Donald Trump escalated the China trade war, then put Mexico on the hot seat.

The May jobs report reflects business and household surveys taken during the week of May 12. That's just after Trump boosted tariffs on $200 billion in Chinese imports to 25% from 10% on May 10. That move came suddenly, following Trump's May 5 tweet that China had reneged on key commitments.

Surprising softness in retail sales has added more urgency to new questions about the strength of the job market. The big unknown is whether the fading of tax-cut stimulus had the U.S. economy on the cusp of a slowdown — even before escalation of the China trade war.

Trump and Chinese President Xi Jinping will both attend the G-20 meeting in Osaka, Japan, at the end of June. If that comes and goes without a China trade deal or restart of trade talks, business uncertainty will grow.

Fed Chairman Jerome Powell said this week that policymakers will act, if needed, to ameliorate the impact of trade conflict on the U.S. economy. That helped feed a three-day, 900-point Dow Jones rally leading up to Friday's jobs report.

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