Overview
- The Bureau of Labor Statistics reported on June 5 that the U.S. added 172,000 nonfarm jobs in May and revised March and April payrolls up by a combined 93,000, leaving the spring hiring trend notably firmer.
- May hiring was concentrated in leisure and hospitality, local government, and health care while financial activities lost jobs and long-term unemployment rose to its highest share since December 2021.
- Markets reacted quickly as Treasury yields climbed, major U.S. stock indexes fell, and Bitcoin slid toward the low $60,000s as investors repriced expectations for interest rates.
- Economists and Fed officials said the stronger report reduces the likelihood of near-term rate cuts and increases the chance that policy will remain restrictive or face a later hike this year.
- The thicker baseline for payrolls and sticky inflation mean higher mortgage and loan costs for households and a longer wait for looser credit conditions that would help relief household budgets.