It’s another strong U.S employment report
U.S unemployment rate fell to an 18-year low last month and U.S employers steadily added jobs.
Non-farm payrolls rose a seasonally adjusted +223k in May and the unemployment rate ticked down to +3.8%.
Wages in May improved modestly, growing +2.7% y/y. Revised figures show employers added +159k jobs in April and +155k in March, a net upward revision of +15k.
Digging deeper
Average hourly earnings for all private-sector workers increased +8c last month to $26.92. The +2.7% annual again is small compared to pre-recession readings.
Note: The last time unemployment was near current levels wages rose +4.3% from a year earlier.
Net result, the low unemployment rate and modest wage increases should keep Fed in line to hike rates at a meeting later this month. Consumer inflation has strengthened in recent months to reach the Fed’s +2% annual target.
The USD has extended its gains against some G7 currency pairs (€1.1670, C$1.2971, ¥109.60, £1.3317).
U.S 10-year yield trades up at 2.91%.
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Dean Popplewell
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