U.S. Job Growth Moderates in May as Unemployment Holds Steady at 4.2%
The U.S. labor market showed signs of modest slowing in May, but the unemployment rate remained steady at 4.2%, matching economist expectations.
According to Friday’s report from the Bureau of Labor Statistics, nonfarm payrolls increased by 139,000 last month, slightly exceeding forecasts of 130,000. April’s job gains were revised down to 147,000 from the initially reported 177,000.
The unemployment rate held firm at 4.2% for the third consecutive month, consistent with both economists’ predictions and April’s figure.
Bitcoin (BTC) responded positively to the data, edging above the $104,000 mark amid a broader market rebound following recent sharp declines.
The May jobs report attracted close attention given a series of recent economic indicators suggesting weakening momentum. These included the slowest ADP jobs growth in over two years, a contractionary reading from the ISM Services index, and an increase in initial jobless claims to their highest level since October.
Meanwhile, the 10-year U.S. Treasury yield, which had started the week near 4.50%, fell to a low of 4.32% ahead of the report. However, in the minutes following the payroll release, yields surged back to 4.44%. This shift corresponded with a sharp decline in market expectations for a July Federal Reserve rate cut, dropping to just 16% from 30%, according to CME FedWatch data.
Looking ahead, the probability of one or more rate cuts by the September Fed meeting also decreased, falling to 65% from 75%.
U.S. stock index futures advanced alongside these moves, with the Nasdaq up 0.8% and the S&P 500 gaining 0.75%.
Additional report details showed average hourly earnings rose 0.4% in May, surpassing the forecasted 0.3% and April’s 0.2% increase. Year-over-year wage growth stood at 3.9%, slightly above expectations of 3.7% and unchanged from April.
