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07/06/24
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More Jobs Added in U.S. In May Than Expected
In May, the U.S. economy added more jobs than anticipated, undermining expectations of the labor market cooling. This has a potential impact on how the Federal Reserve will approach possible interest rate cuts this year.
According to the Labor Department’s Bureau of Labor Statistics data, in May, nonfarm payrolls rose by 272K and surged from the revised lower 165K release in April. Economists had expected a reading of 182K.
This was more than the average monthly rise of 232K over the previous 12 months.
Employment continued to trend higher in various industries, led by leisure and hospitality; government; health care; and technical, scientific, and professional services.
Month-on-month, average hourly earnings rose by 0.4% from April’s 0.2% and higher than projections of 0.3%. The unemployment rate rose to 4.0%, higher than the 3.9% expected.
A crucial goal of the rate tightening cycle by the Fed has been easing labor demand, and policymakers hope that the cooling might relieve upward pressure on inflation.
Earlier this week, there were some indications that the U.S. jobs market had been easing, and on Thursday, weekly jobless claims came in slightly higher than last week’s upwardly revised 221K, and jobs opening as well as private payrolls were lower than expected.
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