The latest employment update, excluding the agricultural sector, reveals a change of 272k jobs against an expected 185k. This outcome contrasts with last month’s addition of 175k jobs.
- Average hourly earnings MoM increased by 0.4% versus the anticipated 0.3%.
- The unemployment rate rose to 4.0%, moving away from the predicted rate of 3.9%.
Decoding the May Nonfarm Payrolls Report
Creating jobs remains a critical gauge of consumer spending, which significantly fuels economic activity. The NFP report provides an extensive overview of job additions or losses within the economy, including the current unemployment rate and shifts in average hourly earnings. This data collection is essential for predicting future consumer spending trends and offering insights into the overall health of the U.S. economy.
For those seeking a deeper understanding of the nuances of nonfarm payrolls and their impact on economic dynamics, our comprehensive exploration is available here:
Implications of the Latest Report
The data from May suggests the U.S. labor market’s resilience, possibly influencing future rate decisions by the Federal Reserve on June 12. Data supporting persistently high inflation include, first of all, the increase in Average Hourly Earnings to 0.4%, as well as the growing number of jobs. On the other hand, however, unemployment increases to 4.0% from 3.9%. Which data will the Fed pay more attention to?
Market Reaction in a Snapshot
The market’s initial reaction focused on the growing number of jobs and higher-than-expected wage growth. Data on rising unemployment remain ignored for now, as the dollar is strengthening, and assets valued in it are falling.
NASDAQ loses over 0.6% in reaction to labor market data.
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