We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
A new Employment Situation — nonfarm payrolls from the Bureau of Labor Statistics (BLS) and unemployment from the Household Survey — is out this morning, with stronger-than-expected monthly jobs totals, 253K, and a smaller-than-expected Unemployment Rate, 3.4%. This is the highest monthly jobs tally, and lowest rate of unemployment, from January of this year.
So much for the Fed funds rate putting pressure on the domestic labor force. With another quarter-point hike earlier this week, everyone was looking toward today’s employment numbers to see if we can finally put to rest 14 months of rate hikes. But with job gains back over a quarter-million last month, and unemployment sinking back down to where it was in the 1960s, it looks once again like the jobs market is proving resilient in the face of higher interest rates. Does this mean we’ll see still more rate hikes in the coming months?
The previous two months did, however, show major downward revisions: from 236K originally reported for March to 165K this morning, and February’s original 326K revised down to 248K — for a total of 189K fewer jobs created in those months than originally thought. This more than makes up the +73K positive jobs surprise we saw for the April tally. And keep in mind revisions for April may be forthcoming over the next couple months.
Average Hourly Wages bumped up to +0.5% from +0.3% the last report, as well as 20 bps higher than expected. Year over year, wages are up +4.4% — the highest since June 2021 and 20 bps bigger than the previous month and anticipated by analysts. The private sector brought in 230K jobs by itself in the month, and the Average Workweek was steady at 34.4 hours. Labor Force Participation was also in-line at a fairly healthy 62.6% (though still off pre-pandemic levels). The U-6, aka “real unemployment,” came in at +6.6% — just 10 bps ahead of the cycle low reached in December of last year.
Pre-market futures dipped a tad on the news, but indices had been stoutly in the green ahead of the release and are even better on the Dow and S&P 500 at this hour: from +180 to +210 and +20 to +30, respectively. Even two regional banks that were starting to look doomed just yesterday, Western Alliance (WAL - Free Report) and PacWest , are back up +22% and +24%, respectively. So we appear to be on an uptrend, regardless, this morning.
In short, these strong employment figures, which also promote further inflation by way of wage gains, may lead to yet further interest rate hikes from the Fed. There’s still a relatively long time between now and June 14th — the next time the Fed makes a rate policy decision — and there are plenty of economic reports to be ruminated over during that time. But if these jobs numbers are any indication, we may have not seen the last of 25 bps rate hikes.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Nonfarm Payrolls Come in Hotter Than Expected
A new Employment Situation — nonfarm payrolls from the Bureau of Labor Statistics (BLS) and unemployment from the Household Survey — is out this morning, with stronger-than-expected monthly jobs totals, 253K, and a smaller-than-expected Unemployment Rate, 3.4%. This is the highest monthly jobs tally, and lowest rate of unemployment, from January of this year.
So much for the Fed funds rate putting pressure on the domestic labor force. With another quarter-point hike earlier this week, everyone was looking toward today’s employment numbers to see if we can finally put to rest 14 months of rate hikes. But with job gains back over a quarter-million last month, and unemployment sinking back down to where it was in the 1960s, it looks once again like the jobs market is proving resilient in the face of higher interest rates. Does this mean we’ll see still more rate hikes in the coming months?
The previous two months did, however, show major downward revisions: from 236K originally reported for March to 165K this morning, and February’s original 326K revised down to 248K — for a total of 189K fewer jobs created in those months than originally thought. This more than makes up the +73K positive jobs surprise we saw for the April tally. And keep in mind revisions for April may be forthcoming over the next couple months.
Average Hourly Wages bumped up to +0.5% from +0.3% the last report, as well as 20 bps higher than expected. Year over year, wages are up +4.4% — the highest since June 2021 and 20 bps bigger than the previous month and anticipated by analysts. The private sector brought in 230K jobs by itself in the month, and the Average Workweek was steady at 34.4 hours. Labor Force Participation was also in-line at a fairly healthy 62.6% (though still off pre-pandemic levels). The U-6, aka “real unemployment,” came in at +6.6% — just 10 bps ahead of the cycle low reached in December of last year.
Pre-market futures dipped a tad on the news, but indices had been stoutly in the green ahead of the release and are even better on the Dow and S&P 500 at this hour: from +180 to +210 and +20 to +30, respectively. Even two regional banks that were starting to look doomed just yesterday, Western Alliance (WAL - Free Report) and PacWest , are back up +22% and +24%, respectively. So we appear to be on an uptrend, regardless, this morning.
In short, these strong employment figures, which also promote further inflation by way of wage gains, may lead to yet further interest rate hikes from the Fed. There’s still a relatively long time between now and June 14th — the next time the Fed makes a rate policy decision — and there are plenty of economic reports to be ruminated over during that time. But if these jobs numbers are any indication, we may have not seen the last of 25 bps rate hikes.