Read the highlights of this week’s commentary from Helios:
- In April, U.S. job openings fell to their lowest level since 2021, signaling a slowdown across the labor market. According to the Bureau of Labor Statistics’ JOLTS report, available positions declined to 8.06 million from 8.36 million in March. This drop in job vacancies contributed to lowering the ratio of vacancies to unemployed workers to its lowest level in nearly three years.
- By contrast, May saw a significant increase in nonfarm payrolls of 272,000, exceeding all forecasts. Average hourly earnings rose by 0.4% monthly and 4.1% annually, heightening concerns about inflation. The unemployment rate rose unexpectedly to 4%, marking the end of a 27-month period of sub-4% joblessness, the longest since the 1960s. This jobs report bolsters the Federal Reserve’s position to maintain rates and reignites debate on the adequacy of the current policy rate to combat inflation.
- In May, the US services sector saw its strongest expansion in nine months as the Institute for Supply Management’s (ISM) composite gauge of services climbed 4.4 points to 53.8, with readings above 50 indicating expansion. The ISM’s business activity index surged 10.3 points to 61.2, the highest level since November 2022 and the most substantial monthly rise since March 2021, providing optimism amidst recent mixed economic data.
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