The release of May's US labor market report revealed that new non-agricultural jobs were significantly more than expected.
Last month, as many as 272 thousand new jobs appeared in this country, while it was predicted that this indicator would reach an average of only 182 thousand. April data decreased by ten thousand to 165 thousand.
On the other hand, unemployment rose from 3.9 percent to four percent, or to the highest level since January 2022. In this case, it is expected that it will not change. The labor market participation rate dropped from 62.7 to 62.5 percent in May.
The so-called unemployment rate, which includes those workers who work part-time but would like to work full-time and those unemployed who would like to work but have given up hope of finding a job and are not actively looking for one, in America in May, compared to the previous one, did not change and reached 7.4 percent. This is the highest level since November 2021.
Average hourly earnings rose 0.4 percent last month, or twice as much as in April. The annual increase of this indicator increased from four percent to 4.1 percent. Economists expected that these indicators would average 0.3 and 3.9 percent.
This time, the private sector in the USA created 229 thousand jobs, and the public sector – 43 thousand. A month before, these indicators reached 158 thousand and 7 thousand, respectively. Economists expected that 170 thousand new jobs would appear in the private sector.
U.S. factories added eight thousand workers in May, up from expectations of five thousand, up from six thousand in April. Employment also continued to increase in several industries, primarily health care (by 68,000), leisure and hospitality (by 42,000), mostly food and beverage (by 25,000), and professional, scientific and technical services (by 32,000). Another increase in jobs was also recorded in the areas of social support employment (15 thousand) and retail trade (13 thousand).
Meanwhile, employment in mining, quarrying and oil and gas production, construction, wholesale trade, transportation and warehousing, information technology and financial activities showed little or no change.
May's nonfarm payrolls were higher than the average monthly gain of 232,000 over the previous 12 months and 246,000 over the first four months of this year.
After the release of the labor market report, traders in the federal funds futures market cut the odds that the Fed will cut its benchmark interest rate in September by about 12 percentage points to about 56 percent, according to CME Group's FedWatch tool.
