BancaMarch: US employment data again surprises on the upside, although other indicators point to a contained moderation.
On Friday, the Payroll Survey revealed an unexpected increase in job creation in May, up to 272,000 jobs, well above the 180,000 estimated and the 175,000 previously reported. The same survey also showed an increase in average hourly earnings of 4.1% year-on-year, up from 3.9% expected and 4% previously.
Financial markets have interpreted these data as a sign of robustness in the labour market, accompanied by risks in a continuation of inflationary pressures, by delaying expectations of a first interest rate cut – the probability of a September cut went from 80% to 40%.
However, that same Friday, the Household Survey published a one-tenth of a point increase in the unemployment rate (from 3.9% to 4%), reaching the 4% mark for the first time in more than two years.
Turning to other data released during the week, the JOLTS survey with data for April indicated a reduction in unfilled job vacancies of 300 million to 8.06 million, the lowest since February 2021. Job creation, according to ADP, disappointed, rising by 152,000, down from 175,000 expected and 188,000 earlier.
In conclusion, the good job creation data provided by the Payroll Survey remains resilient, although other signs point to a gradual slowdown in the labour market, without leading to a sharp slowdown in employment.
