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| US adds 339,000 jobs in May defying slowdown fears | US adds 339,000 jobs in May defying slowdown fears |
| (32 minutes later) | |
| Job creation in the world's largest economy is being closely watched | Job creation in the world's largest economy is being closely watched |
| Job creation in the US remained robust last month, despite rising prices and a sharp spike in borrowing costs weighing on the economy. | Job creation in the US remained robust last month, despite rising prices and a sharp spike in borrowing costs weighing on the economy. |
| Employers added 339,000 jobs, while the unemployment rate rose to 3.7%, as more people entered the labour force. | Employers added 339,000 jobs, while the unemployment rate rose to 3.7%, as more people entered the labour force. |
| The job gains were far stronger than expected, continuing a streak of hiring that has surprised economists. | The job gains were far stronger than expected, continuing a streak of hiring that has surprised economists. |
| Analysts have expected hiring to slow as the US central bank raises interest rates to try to rein in rising prices. | Analysts have expected hiring to slow as the US central bank raises interest rates to try to rein in rising prices. |
| But payrolls have remained resilient, raising questions about whether the Federal Reserve will have to take more aggressive action to bring inflation under control - moves that would lead to higher interest rates for mortgages and other loans. | |
| Inflation, the rate at which prices rise, was 4.9% in the US in April. | |
| While that was the lowest in roughly two years, it remained more than double the 2% rate that the bank considers healthy. | |
| Expectations of what Friday's report might mean for interest rates in the months ahead were divided. | |
| Some analysts said the widespread job gains in May, as hospitals, restaurants, bars and construction firms added workers, was a sign that the Fed will have to raise interest rates more. | |
| The Labor Department also said job gains in April had been greater than previously estimated. | |
| Others said the report included signs that should convince the bank to hold off, pointing to moderating wage gains. At 3.7%, the jobless rate was also the highest in seven months. | |
| Seema Shah, chief global strategist at Principal Asset Management, said the "blow out" job gains in May indicated that the "Fed's job is not yet done". | |
| "The key question now is: can they wait until July or does this monster payrolls number trigger another burst of urgency?" she said. | |
| "Perhaps the report details, with the unemployment rate rising and average hourly earnings growth slowing, tilts the decision to July. But overall, this is not a labour market that is slowing - and if it's not slowing, then inflation isn't coming down to 2%." | |
| Related Topics | Related Topics |
| US economy | US economy |
| Unemployment | Unemployment |