Editor
The U.S. economy added 272,000 nonfarm payroll jobs in May, which beats market estimates.
“Just a strong report. Almost all metrics were solid to robust as jobs soared, hourly earnings jumped, but the unemployment rate, household employment, and labor force plunged.” These were the words that an Evercore ISI analysis used to describe the U.S. nonfarm payrolls string report.
Wall Street had weekly gains after a better-than-expected job report, beating market expectations and concerns over a weakened job market.
Labor market and nonfarm payroll reports are key metrics for the Federal Reserve interest rate cut decision processes. Fortunately, last month’s report went beyond the market explanation. The report reassigned by the Bureau of Statistics shows that the U.S. economy added 272,000 nonfarm payroll jobs in May. Surging from last month’s report of 165,000 new jobs. Initial forecasts were that the U.S. economy would add 182,000 new jobs in May due to rising costs and fears of persistent inflation. A yearly May nonfarm report exceeded the average monthly gain of 232,000. The report also shows that average hourly earnings grew by 0.4% month-on-month. It increased from April’s 0.2% and exceeded projections of 0.3%. Still, the unemployment rate rose slightly last month by 0.4%, above the prediction of 3.9%.
Furthermore, the reports also show a drop in household employment and the labor force. Generally speaking, the data shown today is a strong indicator of the cooling labor market, which might speed up the interest rate cut process. Still, till now, there has been nothing official made by the Fed President or its officials for the sake of more market data. Garrett Melson, who is a strategist at Natixis Investment Managers, shared on its note that “the bulls, the bears, the doves, and the hawks all have something to latch on to… from a market perspective, this perhaps allays some fears about growth moderating too aggressively.”
Meanwhile, in the U.S. stock market, Wall Street main indices dipped higher, with the tech-heavy composite rising by 0.18%, the S&P 500 benchmark was up by 0.27%, and the Dow industrial climbed by 0.21%. On a week-to-week basis, all three indices are on track for weekly gains, with the Nasdaq composite rising by 2.6% this week, its highest weekly gain in the past five months.
The Fed will end its two-day policy meeting by June 12, while investors will focus on next week’s inflation data. Based on market and trade signals, the probability of cutting interest in September is more than 56%. Still, it could decline if next week’s data shows that inflation persists for much longer.
As for the industry news, GameStop’s share prices fell by 22.8% in volatile trading after the announcement of a potential stock offering and a decline in quarterly sales. AMC Entertainment (NYSE
) fell 5.1%, Koss Corp. dropped 8.4%, and Nvidia slipped by 0.8%, extending the previous session’s losses. Its valuation dipped below the $3 trillion mark.
Oil prices finally cooled down after edging higher a couple of days after the OPEC announcement, which will keep cutting daily oil production. The West Texas Intermediate fell by 0.36%, while Brent crude oil decreased by 0.61%.
