US non-farm payrolls up by only 75,000 in May
May US non-farm payrolls fell below economists' predictions.
US non-farm payrolls grew by 75,000, according to the US Department of Labour. That statistic falls far below April’s employment report of 263,000 new positions. Economists expected 185,000 jobs to be added in May.
US non-farm payrolls: key figures
|Professional and business services||+33,000|
Where did non-farm payrolls grow in May?
Professional and business services added 33,000 new jobs. The healthcare industry added 16,000 new positions. Manufacturing jobs only increased by 3000, a likely consequence of businesses being caught in the middle of the US-China tariff war. Retail lost 7600 positions as brick and mortar stores struggle with declining sales.
What are economists saying about May non-farm payrolls?
Charlie Ripley, senior investment strategist for Allianz Investment Management, believes that the latest job report shows that the booming economy is finally slowing down.
‘While much of the attention from investors has been focused on trade disputes and the potential for a slowing economy, today’s disappointing employment report provides further evidence that the end of the business cycle is upon us and economic activity is slowing,’ said Ripley.
While some economists expressed pessimism about May's non-farm payrolls, there was still positive news. The unemployment rate is still low at 3.6%. Brian Coulton, economist at Fitch Ratings, believes that the US economy is still robust.
‘While the slight decline in wage growth will support the [US Federal Reserve’s] patient stance on rates, the average pace of job growth over the last three months (at 151,000) is hardly alarming. It speaks to a slowdown in the domestic economy, but there’s no suggestion of demand falling off a cliff,’ said Coulton.
Will disappointing non-farm payroll numbers influence the Fed?
Ian Shepherdson, chief economist at Pantheon Economics, wrote in an email to clients that the lackluster job numbers may inspire US Federal Reserve chair, Jerome Powell, to cut interest rates. Powell’s recent comments about the Fed possibly taking action to help the US economy is being interpreted as a sign of a future interest rate reduction.
‘These data make it easier for the Fed to (lower rates) either this month or next, if the trade tensions intensify and the stock market drops sharply,’ noted Shepherdson.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Be ready to act on the next non-farm payrolls report
Explore the influence the non-farm payrolls report has on American markets ahead of the next release on 2 July 2021.
Which markets could be more volatile after the NFP report?
Why was the report introduced and what does it tell us?
Why is the report important for traders?
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.