May Employment: Sweet Spot for the Fed

Summary

May’s downshift in hiring to its slowest pace in more than a year still leaves payrolls rising at a robust pace. Employers topped consensus expectations with 390K new jobs. The ongoing solid pace of hiring has been fueled not only by sky-high demand but by more workers returning to the labor force. The labor force participation rate rebounded a tick in May, helping to keep the unemployment rate steady at 3.6% and wages from accelerating further. Today’s report lands in a sweet spot for the Fed. While the labor market remains clearly tight and is adding to inflationary pressures, improving labor supply is helping ease the upward pressure on wages while still allowing more workers to gain employment. But there is a long way to go before restoring the balance to the jobs market that will be needed for the Fed to win the battle on inflation, keeping the FOMC on track to tighten monetary policy aggressively at its next few meetings. READ FULL ARTICLE>>