US Jobs Report: 272K New Positions Added in May

Facts

• The US Labor Department reported on Friday that employers added 272K jobs last month, much higher than an estimated 185K growth, with year-on-year pay increase tracking above inflation at 4.1%.¹
• This comes as nonfarm payroll enrollment had gains notably in health care, the public sector, and leisure and hospitality, each one adding 68K, 43K and 42K new positions, respectively.²
• The government report suggests, however, a potential economic slowdown in the US as its unemployment rate slightly rose to hit 4% for the first time in more than two years.³
• This difference between simultaneous better-than-expected job gains and growing unemployment comes as labor force changes are measured in official surveys of employers, while the latter is based on households polls.⁴
• The report further revised down job growth for March by 5K jobs to 310K, as well as for April to slightly lower 165K positions.⁵
• The latest numbers for America's labor market make it unlikely that the Federal Reserve will cut interest rates anytime soon, with traders reducing the odds of a rate cut in September to about 53%.⁶

Sources: ¹USA Today, ²BLS, ³Associated Press, ⁴Forbes, ⁵FOX News and ⁶New York Post.

Narratives

• Democratic narrative, as provided by New York Times. Robust job growth is a strong sign of economic health and recovery. Additionally, wage increases that outpace inflation are beneficial to workers. While critics are pointing to the results of this report as evidence of economic instability, the reality of these numbers is that the Biden administration's policies have led to this strong job market and economic resilience.
• Republican narrative, as provided by ZeroHedge. The latest jobs report is nothing but a quantitative analysis that amounts to a piece of disinformation ahead of the November election, as all the job growth in May has been in part-time jobs — and all job creation over the past years has gone to illegal immigrants. Forget about the headline payrolls number; the growing unemployment rate is the real deal here.

Predictions