US hiring plunged in May to its lowest level in more than five years, a sign that employers turned cautious after the economy barely expanded in the first three months of the year, reports AP. The Labor Department says employers added just 38,000 jobs last month, the fewest since September 2010. Yet the unemployment tumbled to 4.7% from 5%, the lowest rate since November 2007. The rate, however, fell for a problematic reason: Nearly a half-million unemployed Americans stopped looking for work, and were no longer officially counted as unemployed.
The disappointing figures will likely raise doubts that the Federal Reserve will boost the short-term interest rate it controls at its upcoming meetings in June and July. Many analysts had expected an increase by July. The percentage of Americans participating in the workforce fell to 62.6% in May, the lowest mark this year. "If the labor market gets stronger, that should draw more workers back, but an aging population means it likely won’t return to levels seen in the years just before the 2007-2009, when the level hovered around 66%," notes a blog post at the Wall Street Journal. (Read more unemployment stories.)