JUNE 10, 2024 – LABOR MARKET DEFIES EXPECTATIONS
The labor market exceeded economists’ expectations in May by adding 272,000 new jobs. The data far exceeded a predicted 190,000 new jobs, and a whopping 65 percent higher than the 165,000 jobs created in April. However, the unemployment rate rose by 0.1 percent to 4 percent, the highest since January 2022. Average hourly wages in May were also higher than expected, up 0.4 percent for the month and 4.1 percent year-over-year.
Yet, the Bureau of Labor Statistics also announced last week the number of job openings in the US shrank for the second month in a row, setting a 3-year low. In April, there were 8.06 million jobs posted. This could be attributed to a slowing in employee turnover, with layoffs at their lowest level since December 2022.
The Fed is meeting this week, and it is a virtual certainty they will not change the status quo. The resilience in the labor market has lowered the likelihood of a cut in September to 50 percent.