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Archive for Saturday, June 3, 2006

Slow job growth shows economy losing steam

June 3, 2006

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— Cautious employers added just 75,000 new jobs in May, the fewest in seven months, in a fresh sign the national economy is losing momentum heading into summer.

Rising energy prices, higher borrowing costs and a cooling of the once red-hot housing market are the main forces shaping the slowdown in the country's overall economic activity. Those factors, along with sagging consumer confidence, are making companies wary of bulking up their payrolls in case the economy takes an unexpected turn for the worse, analysts said.

Taking a bit of the sting out of the sluggish job creation was the fact that the nation's unemployment rate dipped to 4.6 percent, the lowest in nearly five years.

Still, when the Labor Department's employment snapshot, released Friday, is viewed as a whole, it points to slower - not faster - economic speed ahead, analysts said. Wage growth also slowed, a development that may be disheartening to workers but comforted economists who worry about inflation taking off.

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