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United States Unemployment May 2024

United States: Job gains beat expectations in May

Total non-farm payrolls grew by in 272,000 May, up from 165,000 in April and overshooting market expectations by around 50%. Job gains occurred in health care; government; leisure and hospitality; and professional, scientific, and technical services. The unemployment rate rose to 4.0% from 3.9% in April.

All in all, the latest figures suggest that the labor market remains robust midway through Q2, boding well for private consumption. This chimes with our panelists’ forecasts of strong growth in consumer spending in the second quarter.

On the latest labor market data, Nomura analysts said:

“Beyond the headline reacceleration, consistent mean reversion in sector-level data raises the likelihood that the April slowdown in non-farm payrolls was temporary. Headline job gains have been a positive outlier compared to a broad range of labor data.”

TD Economics’ Thomas Feltmate commented on the outlook:

“On a trend basis, job gains have averaged a still strong 249k over the past three-months. However, this pace of job growth is unlikely to be sustained indefinitely. By most other metrics, the labor market is already showing clear signs of cooling. Job openings have narrowed to a three-year low, the unemployment rate now sits at a 28-month high, and both the hire and quit rates are now holding steady below pre-pandemic levels after having trended lower over the past year.”

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