Job and Wage Growth Both Speed Up, Lead to Likely Rate Increase
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Today's rosy jobs report has, for the moment, calmed worries about renewed economic sluggishness. The Bureau of Labor Statistics reports that US employers added 280K jobs last month, a number well above the past year's average and predictions of 225K new jobs in May. The unemployment rate inched up to 5.5% from April's 5.4% as Americans previously too discouraged to look for work revived their job hunts. Perhaps most promisingly, wages grew 0.3% after an interminable stagnant stretch.
The news comes as a major relief for the Federal Reserve, which for much of last year was expected to raise the benchmark interest rate this month. That notion began to fade in the face of lackluster economic reports (including a slight retraction in GDP in the first quarter), but the most recent numbers suggest the Fed could still be on track to boost rates later this year. On the other hand, a broader unemployment gauge including part-time workers yearning for full-time jobs and Americans who've dropped out of the labor pool altogether remained stalled at 10.8%, where it's hovered for the past year.