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- The May payroll report indicates that the economy still has its legs under it.
- Economists had expected the creation of 195,000 jobs in May, but the actual number was 339,000, surpassing expectations.
- In addition to the strong May figures, payroll gains for both March and April were revised up by a combined 93,000, indicating even stronger job growth than previously reported.
- Although wage growth slowed, it remained positive, increasing 0.3% over the month though the average workweek declined slightly, falling 0.1 hours.
- However, the unemployment rate increased to 3.7%. While the employment survey data can be more volatile than payroll data and is subject to fluctuations, the increase is still notable and worth keeping an eye on, especially considering the participation rate remained steady.
- Overall, these indicators suggest a continued tight jobs market which may impact the Federal Reserve’s likelihood of additional rate hikes if they focus on job growth; however, the increase in unemployment may continue to give them pause.
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