US labor market resilience was on full display in May as non-farm payrolls rose 172k, nearly double market expectations of around 85k. The report was further strengthened by a sizable upward revision to April’s payroll gain from 115k to 179k, indicating that hiring momentum was considerably firmer than previously thought.
The unemployment rate held steady at 4.3%, while the participation rate was unchanged at 61.8%, suggesting labor-market conditions remain broadly stable despite growing concerns about slowing economic growth.
Wage data were largely in line with expectations. Average hourly earnings rose 0.3% mom after 0.2% in April, while annual wage growth slowed from 3.6% yoy to 3.4% yoy.
The moderation in yearly wage growth may ease some concerns about a wage-price spiral, but the combination of strong hiring, stable unemployment, and still-solid wage gains is unlikely to alter the Fed’s broadly hawkish stance.
| Indicator | Previous | Latest | Expectation |
|---|---|---|---|
| Non-Farm Payrolls | 179k* | 172k | 85k |
| Unemployment Rate | 4.3% | 4.3% | 4.3% |
| Participation Rate | 61.8% | 61.8% | — |
| Avg. Hourly Earnings M/M | 0.2% | 0.3% | 0.3% |
| Avg. Hourly Earnings Y/Y | 3.6% | 3.4% | 3.4% |
*April revised from 115k to 179k
