U.S. Outlook: Job creation disappoints in May

Scott Anderson
Posted by Scott Anderson
Chief Economist

The 138,000 jobs created last month left behind some confusion and uneasiness about the true underlying strength of the U.S. labor market.

Graph showing month-over-month trends in US job creation.The three-month moving average of job creation slipped to just 121,000. Recent job-creation performance is a clear step down from where we have been.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on June 2.

Key observations:
  • The U.S. unemployment rate (4.3%) has now dropped by a half a percentage point since the beginning of the year.
  • It was the 429,000-person drop in the labor force that pushed the unemployment rate lower last month.
  • My take is the FOMC will likely look past today’s less-than-ideal payroll report and move forward with the rate hike in June.
  • The fed funds futures probability of a September rate hike from the Fed sank to just 26.4% this morning.

Click here to read my full report.

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