The bulk of analysts estimate that payroll growth will continue at least until the end of 2023. The labor market remains strong and clears the possibility of a recession.
employment in USA beats expectations in May, but wage moderation could affect interest rates and the monetary politics of the Federal Reserve (FED). The Department of Labor reported Friday that nonfarm payrolls increased by 339,000 jobs last month, reviewing the rise April data. The economists had foreseenor an increase of 190,000 jobs.
Learn more – Follow the price of the blue, official, CCL and MEP dollar in Argentina
Despite strong recruitment, the unemployment rate rose to 3.7% from the record low of 3.4% in April. In addition, there is a decrease in salary pressureswhich could appease Fed officials in their goal of controlling inflation.
Average hourly earnings rose 0.3% in May, bringing annual wage growth down to 4.3%, compared with 4.4% in April. Before the pandemic, annual wage growth was around 2.8% on average.
Despite the challenges in the technology sector and rising costs in home loans and manufacturingthe service, leisure and hospitality sectors continue to recover as businesses have struggled to find workers in recent years.
Retirements are accelerating
Accelerated retirements in the health and education sector, along with the growing demand for services, are driving job growth. According to the Department of Labor, at the end of April there were 10.1 million vacancieswith 1.8 positions available for each unemployed person.
Most economists expect that job growth to hold until year end. Currently, there is a 70% chance that the Federal Reserve will keep its interest rates unchanged at the next meeting of the June 13 and 14, according to CME Group’s FedWatch tool. The FED has already increased its reference interest rate in 500 basis points since March 2022.
On the morning of this Friday June 2nd the attention of the markets was focused on the data revealed by the Department of Labor in its report on the labor market, since the document is key to the decision that the Fed has to make on a break in the rate cycle of interest or continue with su hawkish policy against inflation.
Source: Ambito
