US jobs report 'concerning', Yellen warns
The head of the US central bank says the US jobs report for the month of May is “concerning” and “disappointing.”
Federal Reserve Chair Janet Yellen said Monday that the May jobs report had posed new questions and that the situation would have to be watched in case of a broader slowdown.
In a speech on the economic outlook to the World Affairs Council of Philadelphia, Pennsylvania, Yellen warned that a number of risk factors threaten US economic growth, including decreasing consumer spending and business investment, and slowing Chinese growth.
She also warned that the upcoming UK referendum vote on whether to remain or split from the European Union could negatively impact the US economy.
Yellen said the worsening labor market could make it harder for the US central bank -- also known as the Federal Reserve or simply as the Fed -- to raise interest rates.
US job creation in May fell to its lowest level in almost six years as manufacturing and construction employment fell sharply, heightening worries about economic growth.
US employers added only 38,000 jobs last month, the smallest gain since September 2010, the US Labor Department said on Friday.
The job creation figure for May was far short of expectations. Economists polled by Reuters had forecast payrolls rising by 164,000.
The unemployment rate fell to 4.7 percent from 5 percent, but this was partly due to people dropping out of the labor force and no longer being counted as unemployed by the government.
The weak US jobs report sent the dollar and stocks sinking. The dollar index — a gauge of the US currency against other reserve currencies — was down 1.5 percent on the day at 94.15, after hitting a two-month intraday high of 95.97 on Monday.
Despite this, Yellen stressed she was still optimistic on the outlook for US economic growth. “One should never attach too much significance to any single monthly report,” Yellen said, adding that the overall labor market situation has been “quite positive.”
Economists said that although Yellen attempted to portray a brighter picture than the jobs data suggested, her concerns were evident.
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