The U.S. unemployment rate is at its lowest level in 16 years, even as job growth slowed in May.

Employers added a weaker-than-expected 138,000 jobs in May, undershooting forecasts of around 180,000. Job gains for March and April were also revised down, showing 66,000 fewer jobs were added than first estimated.

The Labor Department’s monthly employment report is closely watched as a a gauge of the economy and, of late, for hints on whether the Federal Reserve is likely to hike interest rates.
The low unemployment rate demonstrates that the labor market is tight. Pantheon Macroeconomics’ chief economist, Ian Shepherdson, observed that “employers are still able to find the people they want, though surveys and anecdotal evidence strongly suggest that it is becoming harder to find qualified staff.”