The U.S. Labor Department on May 6 reported that our economy added the fewest number of jobs in seven months, 160,000. So far in 2016, employment gains have averaged 192,000 per month. This is down from 2015, when we averaged an increase of 229,000 workers monthly. Weak domestic economic growth, the lethargic global economy and declining corporate profits contributed to our lackluster job growth .

The job report prompted some financial institutions, including Bank of America and Barclays, to lower their interest rate hike expectations for 2016 from two to one.

“Smallest U.S. job gains in seven months temper rate hike expectations after a soft start to the year,” said Michael Gapen, chief economist at Barclays.

Market participants now discount the likelihood of an interest rate increase at the Fed’s June 14-15 meeting, according to CME Group’s Fed Watch. They see a less than 50 percent probability of rate hikes in September and November, with a 59 percent chance at the December meeting.

President Obama, at an impromptu news conference at the White House after the job report was released, gave an upbeat message. He highlighted that America has enjoyed 74 months of private-sector job creation and noted that our economy had created 14.6 million new jobs during the recovery despite headwinds in the global economy.

The unemployment rate remained at 5 percent because the labor force participation rate fell 0.2 percentage point, to 62.8. The participation rate is a broad measure of unemployment that includes Americans stuck in part-time jobs or too discouraged to look for work. The rate was the lowest since 2008. The payroll numbers and the unemployment rate tend to dominate the headlines, but the Federal Reserve also pays close attention to the participation rate.

The jobs report included two bright spots:

¦ Average hourly earnings have grown year-on-year by 2.5 percent to $25.53 per hour.

¦ The average workweek (34.5 hours) has increased better than 2 percent from a year earlier.

The combination of slightly higher pay and longer hours provided workers a slight increase in their take-home wages, which should support consumer spending.

Wage pressures are building rapidly for engineers, consultants and other workers with specialized skills, said Samit Ghosh, chief executive of P3 Group’s North American automotive division.

Professional-oriented companies, health care providers and financial firms contributed about two-thirds of the job increases.

Employment in other major industries, including construction, manufacturing, wholesale trade and retail trade, showed little or no change over the previous month.

Although the job report was disappointing, we should expect the economy to expand for the rest of 2016 at an annual rate of 1.5 percent to 2.5 percent. This should keep the unemployment rate flat.

Federal Reserve chairwoman Janet Yellen said in December 2015 that the U.S. economy needs to add fewer than 100,000 jobs a month to absorb new entrants to the workforce.

According to the Wall Street Journal, Yellen said last month: “The labor market is healing. We’re coming close to our assigned congressional goal of maximum employment.”

Stated differently, Yellen reflects current thinking that 5 percent unemployment is acceptable.

The problem with Yellen’s comfort level is that April’s job report understates the problem. Let me explain. The Labor Department provides a broader definition of unemployment, called U-6. This includes people who want to work and have looked for work during the previous year, discouraged workers who have stopped looking because of economic conditions and people who are working part time but want to work full-time.

Under this definition, unemployment is close to 10 percent.

Eight years after the Great Recession, we have indeed made progress. Abnormally low interest rates have helped, but we still suffer from stubborn unemployment and underemployment. We cannot expect new government programs until 2017, given our upcoming elections. Therefore, we remain reliant on the private sector to move us into a higher gear.

Originally published in the Sarasota Herald-Tribune