"The May employment report is consistent with continued rebalancing in the US labor market, not deterioration. The print supports our expectation for the Fed to remain patient delaying the first rate cut until enough data has suggested sufficient progress on the inflation front," says Yelena Shulyatyeva, Senior US Economist at BNP Paribas.
Key Messages
- Significantly stronger-than-expected payrolls in May coupled with an increase in the jobless rate is consistent with continued rebalancing in the US labor market, not deterioration.
- The report will reassure Fed officials that they can remain patient in waiting to see sufficient progress on inflation, in our view.
- Despite the unemployment rate rising, the speed of increases in the jobless rate is insufficient to trigger the Sahm rule.
