Weak U.S. employment report dims prospect of Fed rate hike

Nonfarm payrolls increased by only 38,000 jobs last month, the smallest gain since September 2010, the Labor Department said on Friday... Underscoring the report's weakness, employers hired 59,000 fewer workers in March and April than previously reported. While the unemployment rate fell three-tenths of a percentage point to 4.7 percent in May, the lowest level since November 2007, that was in part due to people dropping out of the labor force.

"This is not a good report, and it may well give Fed officials second thoughts about increasing interest rates again this month or next, as some have suggested lately," said Peter Ireland, an economics professor at Boston College.