In May, U.S. job growth picked up unexpectedly, with employers adding 272,000 jobs, surpassing the anticipated 185,000, according to the Labor Department’s latest report. Despite this robust job addition, the unemployment rate rose to 4%, the highest since January 2022, indicating a mixed economic signal. Here are the key details from the report: The media is reporting it all as some kind of success, meanwhile back in reality – it’s all part time workers and bad news. But here we go… This is just a plain a lie … Full-time workers: -625K Part-time workers: +286K. See bottom of article for more.
- Supposed Strong Job Growth: The economy exceeded expectations by adding 272,000 jobs in May, showcasing the labor market’s resilience. This increase is notably higher than the forecasted 185,000 by LSEG economists, reflecting continued strength in the labor market.
Nonfarm payrolls surged by 272k in May, well above consensus (180k). Job growth was strong across industries. The chart below compares May job growth against 2-year averages by industry. pic.twitter.com/ZRHaeb6zYC
— Augur Labs Infinity (@AugurInfinity) June 7, 2024
- Increase in Unemployment Rate: Contrary to expectations that it would remain at 3.9%, the unemployment rate inched up to 4%. This increase suggests a complex dynamic in the job market, where despite strong job creation, more individuals are either entering or re-entering the job market, not all finding immediate employment.
- Wage Growth and Inflation Concerns: Average hourly earnings rose by 0.4% in May, with a year-over-year increase of 4.1%. This continued strong wage growth contributes to inflationary pressures, complicating the Federal Reserve’s policy decisions regarding interest rates.
US job growth surged in May, with wages accelerating, delaying expected Fed rate cuts. Nonfarm payrolls rose by 272,000, beating projections, while average hourly earnings climbed 0.4% from April and 4.1% from a year ago. However, unemployment increased to 4% from 3.9%. pic.twitter.com/hnTBorQIca
— Michael St. Jean (@MichaelStjean) June 7, 2024
- Market Reactions and Federal Reserve’s Stance: The robust job growth and wage increases have impacted financial markets and tempered expectations for an early Federal Reserve rate cut. Following the release of the jobs report, stock prices initially fell and bond yields rose, reflecting investor concerns about prolonged higher interest rates.
- Sector-Specific Growth and Economic Outlook: Significant job gains were observed in health care, government, leisure and hospitality, and professional, scientific, and technical services. Despite some sectors showing cooling, such as a decline in temporary jobs, the overall job market remains vigorous.
US job growth surged in May and wages accelerated, prompting traders to push back the expected timing of Federal Reserve interest-rate cuts https://t.co/PJNwBhNPkY pic.twitter.com/kUL9j4SmcD
— Bloomberg TV (@BloombergTV) June 7, 2024
The labor market’s continued strength suggests a robust underlying economy but also poses challenges for managing inflation and setting monetary policy. With inflation rates previously hitting highs and now moderating, the Federal Reserve remains cautious, hinting at no immediate rate cuts and a data-driven approach to future decisions. This situation leaves analysts and investors weighing the prospects of when the Fed might begin to ease rates, with some now expecting cuts to be pushed out further into the year or even into the next.
And now some facts…
Once again traders don’t understand the #jobs report. Most of the 272K jobs supposedly created in May likely don’t exist. The unemployment rate rose to 4%, while labor force participation fell to 62.5%. Declining labor force participation and rising wages evidence #stagflation.
— Peter Schiff (@PeterSchiff) June 7, 2024
UGLY jobs report for May: headline jobs number up 272k but employment from household survey PLUNGED 408k, continuing the unprecedented divergence of these 2 surveys; employment level has now fallen 783k in the last 6 months… pic.twitter.com/s5ZOUhXUVk
— E.J. Antoni, Ph.D. (@RealEJAntoni) June 7, 2024
Major Points
- U.S. employers added 272,000 jobs in May, significantly exceeding expectations of 185,000. (Part timers rule though, they don’t want to point that out)
- The unemployment rate rose to 4%, the highest since January 2022, indicating more people are entering the job market.
- Average hourly earnings increased by 0.4% in May, with an annual rise of 4.1%, suggesting ongoing inflationary pressures.
- The robust job figures impacted financial markets, dampening hopes for near-term interest rate cuts by the Federal Reserve.
- Key sectors such as health care, government, and leisure and hospitality led the job gains, showing continued economic strength.
Charles William III – Reprinted with permission of Whatfinger News
