The Labor Department’s Bureau of Labor Statistics shared its jobs report on Friday, which revealed that the United States economy added more jobs than expected. The analysts expect this development to cause the Federal Reserve to hold off its plans to lower the interest rate.
According to the report, 272,000 nonfarm payrolls were added in the month of May, compared to 165,000 in the month prior. The number significantly exceeded estimates of 190,000.
The unemployment rate saw a slight climb to 4% for the first time since January 2022, compared to 3.9% in April. The jobless rate has been at 4% or less for the past 30 months, which is the longest streak since 1970.
“These strong labor market indicators continue to point to strong, stable growth in the U.S. economy,” said the Labor Department in its report.
With such a strong performance in the job market, the Fed could decide to place interest rate cuts on the back burner. Around 50% of analysts now expect that the cuts will take place in September, down from 73% after April’s report.
“So much for slowing. The headline payrolls number is eye popping…. The Fed will take this to mean that they can still focus squarely on inflation without worrying much about growth,” said Brian Jacobsen, chief economist at Annex Wealth Management, told Reuters.