Investing.com – The U.S monthly employment report showed that the economy created fewer jobs than forecast in May, though the unemployment rate unexpectedly ticked down, according to official data released on Friday.
Non-farm payrolls (NFP) rose just 138,000 in May, compared to the rise of 174,000 a month earlier that was revised from the initial increase of 211,000. The data missed the consensus estimate for the creation of 185,000 jobs.
The jobless rate unexpectedly dropped to 4.3%, from the prior 4.4%. Analysts had expected no change.
Average hourly earnings rose month-on-month by 0.2%, in line with consensus and the prior increase that was revised down from an initial 0.3% advance.
On an annualized basis, wage inflation rose 2.5% last month, in line with April’s gain but below expectations for a 2.6% rise.
The increase in wages is being closely monitored by the Federal Reserve for evidence of diminishing slack in the labor market and upward pressure on inflation.
Additionally, the private sector created more of the new job contracts than expected in May with a total of 143,000, compared to consensus expectations for 173,000. April’s number was revised down to 173,000 private nonfarm payrolls, from the prior reading of 194,000.
Government payrolls decreased by 9,000 last month, compared to the creation of 1,000 public jobs created in April, revised from an initial gain of 17,000 positions.
The participation rate slipped to 62.7% in May from the previous reading of 62.9%.
The U6 unemployment rate, that includes those workers who are working part-time for purely economic reasons, decreased to 8.4% last month from April’s reading of 8.6%.
Furthermore, the average weekly hours remained unchanged as expected at 34.4 in May. from the prior month’s reading of 34.4.
After the release, the U.S. Dollar Index traded at 96.82, compared to 97.19 earlier. EUR/USD traded at 1.1271, from 1.1215 before the publication, USD/JPY traded at 110.78, from 111.41 earlier, and GBP/USD was at 1.2894, compared to 1.2854 previously.
U.S. futures pointed to a higher open on Wall Street. The blue-chip Dow futures gained 0.14%, S&P 500 futures rose 0.05% while the Nasdaq 100 futures traded up 0.18%.
Elsewhere, in the commodities market, gold futures traded at $1,270.69 a troy ounce, compared to $1,262.64 ahead of the data, while crude oil traded at $47.37 a barrel from $47.34 earlier.