May Nonfarm Payrolls Exceed Forecasts Amid Signs Indicating Hiring Momentum
The US economy added more jobs than projected in May, while economists said upward revisions to payrolls growth in the two prior months indicated momentum in hiring activity.Total nonfarm payrolls rose by 172,000 last month, the Bureau of Labor Statistics said Friday, nearly double the 88,000 increase expected in a Bloomberg-compiled survey. April's gain was upwardly revised to 179,000 from the initial 115,000, with March's tally also getting a boost, to 214,000."Overall, this was a solid employment report," Thomas Feltmate, senior economist at TD Economics, said. "Not only did headline payrolls come in stronger than expected, but revisions to prior months were meaningfully higher and well above six-and-twelve-month averages, suggesting some reacceleration in hiring activity."Private payrolls increased by 120,000, exceeding the consensus for a gain of 89,000, but the pace slowed from 177,000 the month prior, the BLS reported. The unemployment rate was steady at 4.3%, which matched Wall Street's projection.The BLS report showed employment gains across manufacturing, construction, healthcare and hospitality."Job growth is no longer exclusively being driven by acyclical sectors like healthcare and social assistance, with more cyclically sensitive sectors like manufacturing, construction and leisure and hospitality also contributing," Feltmate said.Earlier this week, ADP (ADP) reported stronger-than-expected private-sector hiring for May, while Challenger Gray & Christmas said job cut announcements in May hit the highest for the month since 2020.Markets largely expect the central bank's Federal Reserve to leave interest rates unchanged at its policy meeting later this month, which would mark its fourth straight pause, according to the CME FedWatch tool."The labor market found its footing over the last three months, and job growth appears to be running well-above estimated breakeven levels," Scott Anderson, chief US economist at BMO, said in a report. "While great news for workers and consumers that are struggling with higher prices, it makes the Fed's next move all the more complicated."Fed officials flagged the possibility of higher interest rates if the Middle East conflict keeps inflation above the 2% goal, according to the minutes from the central bank's April meeting."The doves' case that the labor market is in need of rate cuts is difficult to square with these recent metrics, bolstering the hawks' case that rate hikes may be needed to bring inflation back down to target," Anderson said.Price: $231.98, Change: $+0.67, Percent Change: +0.29%
