U.S. nonfarm payroll jobs increased by 139,000 in May, well above the 126,000 jobs expected by economists. At the same time, it marked a decline from April’s reading of 147,000, which was revised down from 177,000. The monthly average increase over the past year is 149,000 jobs.
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Furthermore, the unemployment rate remained unchanged from 4.2% last month. The rate has bounced between 4.0% and 4.2% since May 2024.
On the other hand, the government continues to slash jobs. Federal jobs dropped by 22,000 in May, bringing the year-to-date total to 59,000.
Market Rise, Rate Cuts Odds Fall on Jobs Report
The Fed’s dual mandate seeks to maximize employment and keep prices stable by keeping inflation at bay. With a better-than-expected nonfarm payrolls report, it’s less inclined to cut rates and stimulate the economy. Traders agree, as there is now a 99.9% chance that the Fed will leave rates unchanged at the June 18 meeting, up from 96.6% yesterday. Additionally, traders have assigned an 83.4% chance that rates remain unchanged on July 30, up from 68.6% yesterday.
The S&P 500 (SPX) is set to open higher by nearly 1% as the market digests the better-than-expected jobs report.
