In this morning’s data, the economy added 172,000 jobs in May, much higher than expected, and the previous month was also revised higher. Reviewing the individual categories, the Leisure and Hospitality industry, the Health Care and Social Assistance industry, and Government Jobs were relatively strong, while the Financial Activities industry was relatively weak. The Unemployment Rate remained at 4.3%. Average Hourly Earnings increased 0.3% in May, as expected, and grew 3.4% on an annual basis. The Labor Force Participation Rate was 61.8%, as expected and the same as the previous month. Average Weekly Hours were 34.3, also the same as the previous month.
Overall, a higher-than-expected increase in headline payrolls in May, coupled with no change in the unemployment rate. Job increases in health care, leisure and hospitality, and government industries were offset slightly by financial activities. Job growth in the services sector was higher than in the goods sector. Wages increased slightly more in May than they did in the previous month, and the annualized increase was right at the 30-year average. Both labor force participation and weekly hours were the same as the previous month.
The labor market appears stable, given the job increases in recent months and the unemployment rate holding steady over that same period. As a result, the Federal Reserve will likely be focused on elevated inflation, rather than the labor market, as they welcome a new chair. As the conflict with Iran continues, how well consumers maintain their spending amidst higher oil prices will be a key factor for the economy in the weeks ahead.
In all, the yield on the 10-year US Treasury is higher this morning, and equity futures are mixed as we head into the market open.
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