Scott Anderson, Chief Economist at Bank of the West, offers some quick thoughts on the U.S. Payroll Report:
Job growth roared back to life in May. +280K net non-farm jobs were created, outdistancing all expectations, and bringing the average monthly job growth over the last 3 months to +207K. Private service providing industries drove the job gains.
Solid upward revisions for March and April jobs as well- a net +32K jobs
Wage growth accelerated; average hourly earnings +0.3% and 2.3% yoy.
Don’t sweat the unemployment rate rise to 5.5% from a revised 5.4% for April. The increase was driven by a healthy increase in the labor force participation rate to 62.9% as discouraged workers re-entered the labor force.
Bottom-line: The May payroll report supports the transitory slowdown story in the U.S. and points to a better second half performance. Not enough for the FOMC to pull the trigger in June in my opinion, though September is still in their sights. S&P 500 futures are trading down, and the 10-Year Treasury yield is up 10 basis points to 2.4 percent.Tags: economy, employment, U.S.