*U.S. unemployment rate fell to the lowest level in 16 years even as the pace of hiring slowed in May. The data suggest employers are starting to add to payrolls more slowly in a tight labor market.
Nonfarm payrolls rose by a seasonally adjusted 138,000 from the prior month, the Labor Department said, and job gains in the prior two months were revised down.
The unemployment rate fell to 4.3% from the prior month’s 4.4% reading, with the caveat that the labor force shrank last month. The rate was last this low in May 2001. Economists expected 184,000 new jobs and a jobless rate of 4.4%.
Average hourly earnings for private-sector workers increased by four cents to $26.22 an hour in May. From a year earlier, wages rose 2.5%. Annual wage gains have stayed near the 2.5% pace since late 2015, despite a steady decrease in the unemployment rate.
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