Job growth was surprisingly strong in May, pushing back lingering fears of a broader economic slowdown and likely slowing the Federal Reserve’s rate-cutting schedule.
The U.S. economy added 272,000 jobs this month, well above the Dow Jones consensus estimate of 190,000. That’s also higher than the average monthly increase of 232,000 over the past 12 months, according to the U.S. Bureau of Labor Statistics.
Employment increased in several industries in May, with healthcare again leading the way this month, followed by government and hospitality. The three sectors created 68,000, 43,000 and 42,000 jobs respectively, similar to last year. These sectors also accounted for more than half of the month’s total gains. More than 83,000 jobs were created in the combined health and social assistance sector in May.
The professional, scientific and technical services sector was also a bright spot in May, adding 32,000 jobs during the month, well above the average monthly gain of 19,000 over the past 12 months.
On the other hand, employment in the welfare sector has been trending upward, with a gain of 15,000 last month, below last year’s industry average of 22,000 jobs per month. Meanwhile, there were job losses in department stores and in furniture and furnishings stores.
Other major industries – including oil and gas production, construction, manufacturing, information and financial activities – saw little or no change in employment during the month, according to the report.
Investors walked away from the report discouraged that the Federal Reserve would cut interest rates in June, noting that rising job growth and above-average wage growth paint a picture of a fairly strong consumer.
“As has been the case recently, employment growth was driven by non-cyclical areas such as healthcare and government, but cyclical areas such as leisure and hospitality were strong… This will likely keep the Fed in a holding pattern, with the former.” “The cut probably won’t happen until September , assuming we continue to see weaker inflation,” Sonu Varghese, global macro strategist at Carson Group, said on Friday.
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2024-06-07 18:11:40
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