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U.S. Job Creation Beats Consensus in May; Unemployment Drops Further

Published 06/01/2018, 08:30 AM
Updated 06/01/2018, 08:30 AM
© Reuters. - Nonfarm payrolls (NFP) rose by 223,000 in May, according to official data released on Friday.

The data was higher than the consensus estimate for the creation of 189,000 jobs and above the 178,000 positions that the ADP report indicated on Wednesday.

The previous month’s reading of NFP was revised to 159,000 from the 164,000 registered initially.

The jobless rate unexpectedly fell from 3.9% to 3.8%, compared to the consensus forecast for it to hold steady.

Average hourly earnings advanced 0.3% month-on-month in May, above expectations for a 0.2% gain.

That was higher than April’s increase of 0.1%.

On an annualized basis, wage inflation grew 2.7% in May, in line with expectations.

The prior month’s advance was 2.6%.

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. Economists generally consider an increase of 3.0% or more to be consistent with rising inflation.

Average weekly hours clocked in at 34.5 last month. That was in line with the forecast for them to hold steady at April’s reading.

Additionally, the private sector created more new job contracts than expected in May with a total of 218,000.

Analysts had forecast the creation of just 183,000 new private sector jobs.

April’s number was revised to an increase of 162,000 private nonfarm payrolls, from the prior reading of 168,000 jobs in the private sector.

Government payrolls increased by 5,000 last month, compared to the prior destruction of 3,000 public positions.

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April’s data on public positions was a upward revision from the initial reading of the destruction of 4,000 public positions.

The participation rate decreased to 62.7% in May, from the prior month’s reading of 62.8%.

The U-6 unemployment rate, that includes those workers who are working part-time for purely economic reasons, fell to 7.6% in May from the prior 7.8%.

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