Wages in United States
Job gains beat expectations again in May
Total non-farm payrolls grew by 339,000 in May, beating market expectations of a 195,000 increase. Gains in professional and business services, government, health care, construction, transportation and warehousing, and social assistance underpinned the reading.
However, the unemployment rate rose to 3.7% in May from 3.4% in April, while wage growth slowed and the average hours worked per person declined. As such, while the headline payrolls data is undoubtedly positive, these additional indicators suggest some softness in the labor market. Looking ahead, our panelists see the labor market loosening slightly in the coming quarters on the back of tight monetary policy, with the unemployment rate forecast to move above 4% by Q4.
On the monetary policy implications, Nomura analysts said:
“The large upside surprise in headline payrolls is the main story. However, there were enough confounding details in today’s report that the FOMC doves should be comfortable continuing to support a near-term pause.”
United States Wages Chart
United States Wages Data
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