The U.S. economy is expected to expand at a 3.4 percent annualized pace in the second quarter based on a weaker-than-expected report on domestic payrolls in May, the Atlanta Federal Reserve’s latest GDP Now forecast model showed.
The latest second-quarter gross domestic product estimate was slower than the previous reading of 4.0 percent calculated on Thursday, the Atlanta Fed said.
The apparent downgrade came just after U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent.
Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labor Department said on Friday. The economy created 66,000 fewer jobs than previously reported in March and April.
Last month’s job gains could still be sufficient for the