Senior Economist at UOB Group Alvin Liew evaluates the latest US Nonfarm Payrolls figures for the month of May.
Key Quotes
“It was a “Goldilocks” jobs report for the US economy in May as the employment gains accelerated compared to April but it was not too hot a print to sound the alarm for Fed tightening. The US nonfarm payrolls (NFP) rose by 559,000 jobs in May, an improvement from the upwardly revised 278,000 in Apr (prelim Est 266,000) but missing the Bloomberg median estimate of 674,000 jobs… That said, employment level is still 7.6 million jobs below the pre-pandemic level (of Feb 2020).”
“After a brief uptick in Apr, unemployment rate resumed its downward trend as it eased further to 5.8% in May (from 6.1% in Apr). This was the first sub-6% unemployment rate since the onset of the pandemic (Mar 2020). Part of the reason for the dip was due to the moderation in the participation rate to 61.6% (from 61.7% previously).”
“The number of unemployed persons fell by nearly half a million to 9.3mn in Apr (but importantly, it is still 3.6mn higher than in prepandemic level of Feb 2020).”
“Following the release of the May jobs report, the market reaction was positive as the Goldilocks jobs print is robust enough to show the US economic recovery remain on track thanks to the acceleration of the vaccine rollout across the country and the boost from the various fiscal stimulus, but at the same time, the numbers are not running overly hot (with the Fed’s message of the economy is in a good trajectory but still some way from “substantial further progress” still intact).”
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