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To: robert b furman who wrote (24722)	6/4/1999 9:17:00 AM
From: Chip McVickar	Respond to of 44573

Wall St. Open Seen Uneasy After Data By Caren Bohan WASHINGTON (Reuters) - The U.S. economy created jobs at a much slower-than-expected pace in May, but a retreat in the unemployment rate to a 29-year low suggested the job market was still tight, the government said Friday. The number of workers on payrolls outside the farm sector increased by a paltry 11,000, the Labor Department said. But that followed a surge in employment of 343,000 in April, revised up from the previously reported gain of 234,000. The jobless rate fell to 4.2 percent, matching the rate recently seen in March and not seen before that since February 1970. The rate was 4.3 percent in April. ''A weak payroll creation number does not necessarily indicate a weakening in labor market conditions but rather that there is no longer an available supply of workers looking for jobs,'' said David Resler, managing director at Nomura Securities International Inc. ''This is to be expected with an unemployment rate at 4.2 percent.'' U.S. economists in a Reuters survey had expected payrolls to grow by 216,000 and predicted the unemployment rate would stay steady at 4.3 percent. Financial markets have been jittery in the run-up to the release of the May employment figures because players will be looking to the report for clues on whether the Federal Reserve is likely to raise interest rates at a meeting later this month. The Fed has become concerned that the economy may be growing too quickly and that inflationary pressures may begin to build, especially in the job market. The inflation-sensitive U.S. bond market surged briefly on the report's release but then quickly back down to levels held before the data's publication. Traders said they disliked the revision in the April payrolls figure to 343,000 from 234,000 and also felt uncomfortable with the gain in monthly earnings in May. The report showed average hourly earnings, a closely watched gauge of wage inflation, grew strongly in May, up 5 cents to $13.19. Bureau of Labor Statistics Commissioner Katharine Abraham said an updating of the payrolls series to include benchmark revisions and the incorporation of new seasonal adjustment factors may have affected the recent numbers. In addition to a major revision to the April employment figures, March job growth was also revised up sharply, indicating more strength in the employment trends of the past few months than suggested by the very small May job gain. Abraham also said weather patterns probably were behind ''erratic'' changes in construction employment trends. A breakdown of the jobs figures showed that May's weak hiring trends were concentrated in goods producing sectors. The beleaguered factory segment lost 45,000 jobs, while construction employment was down 40,000. Service-producing industries, as usual, picked up the slack, gaining 103,000 jobs. ''Given the mixed nature of this report, the Fed is going be on hold until the CPI (Consumer Price Index),'' said Phil Hill, economist at Briefing.com. ''I don't think a rate increase is a foregone conclusion. I don't think they've made a decision now.''