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Economic news
07.06.2024

U.S. nonfarm payrolls rise much more than forecast in May; unemployment rate unexpectedly increases

The U.S. Labor Department reported on Friday that nonfarm payrolls jumped by 272,000 in May after a downwardly revised 165,000 increase (from 175,000) in April. This exceeded the average monthly gain of 232,000 over the prior 12 months. 

According to the report, the largest jobs increases occurred in health care (+68,000), government (+43,000), leisure and hospitality (+42,000), and professional, scientific, and technical services (+32,000). 

The unemployment rate, however, rose to 4.0 per cent from an unrevised 3.9 per cent in the prior month. This marked the highest rate since January 2022 (4.0 per cent). 

Economists had forecast the nonfarm payrolls to advance by 185,000 and the jobless rate to hold steady at 3.9 per cent.

The labour force participation rate slipped to 62.5 per cent in May from an unrevised 62.7 per cent in the previous month, while hourly earnings for private-sector workers climbed by 0.4 per cent m-o-m (or $0.14) to $34.91, following an unrevised 0.2 per cent m-o-m increase in April. This represented the strongest monthly rise since January (+0.5 per cent m-o-m). Economists had anticipated the average hourly earnings to rise by 0.3 per cent m-o-m in May. 

Over the year, the average hourly earnings soared 4.1 per cent in May, following an upwardly revised 4.0 per cent surge (from +3.9 per cent) in the previous month. This marked the first acceleration in annual average hourly earnings growth in four months. Economists had expected the annual wage to grow by 3.9 per cent in May.

The average workweek remained unchanged at 34.3 hours last month, matching economists' estimate of 34.4 hours.

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