US jobs
US jobs report for May 2024
  • Prior month: 175K revised 165K

Details of the May 2024 jobs report:

  • non-farm payroll for May 272K vs 185K estimate.
  • Two-month net revision -15K vs -22K prior
  • Unemployment rate 4.0% vs 3.9% expected
  • Prior unemployment rate 3.9%
  • Participation rate 62.5 % vs 62.7% prior
  • U6 underemployment rate and blood for % vs 7.4% prior
  • Average hourly earnings + 0.4 % m/m vs +0.3% expected
  • Prior avg hourly earnings +0.2% m/m
  • Average hourly earnings + 4.1 % y/y vs +3.9% expected
  • Average weekly hours 34.3 vs 34.3 expected
  • Change in private payrolls +229K vs +170K expected
  • Change in manufacturing payrolls +8K vs +5K expected
  • Household survey -408K vs -25K prior

more details:

  • Goods producing +25K
    • construction +21K
    • mining and logging -4K
    • manufacturing +8K
  • Services producing +204K
    • Healthcare +86K
    • wholesale trade +3.1K
    • retail trade +12.6K
    • transportation and warehousing +10.6K
    • utilities +1.3K
    • information 0.0
    • financial services +10.0K
    • professional business +33K
    • private education and health +86K
    • leisure and hospitality+42K
    • Other +6K
  • Government +43K

Temporary jobs subtracted -14.1K

The data is strong. The only weaker point was the 4% unemployment rate, but the wages were higher. The jobs added was higher.

The yields are higher with the

  • 10-year now up 12 basis points at 4.402%.
  • 2-year yield is up 13.1 basis points to 4.851 basis points

Looking at the implied stocks averages now

  • Dow Industrial Average average -165 points
  • S&P index -23.96 points
  • NASDAQ index -85 points

the US dollar is higher with the

  • EURUSD trading down to 1.08285. That was near the low price from Monday's trade at 1.08271
  • USDJPY is trading back above its 200 hour moving out at 156.439. That is now a close barometer for buyers and sellers. Standby was more bullish
  • GBPUSD is moved down to test its 100 bar moving average on the four hour chart at 1.2735. The current price is trading at 1.2736. Breaking below would open the door for further selling/a shift more to the downside.

The chance of a fed funds cut now:

  • July: 9%
  • September:55%
  • November: 68%
  • December: 90%

The year end Fed funds rate now projecting -39 basis points now. The FOMC will meet next week and announcer interest rate decision on Wednesday. Also released will be the central tendencies and the so-called dot plot. At the last release of the dog park, the Fed was projecting three rate cuts. What does the Fed see now? I would guess one but it could be split between one and two to reflect the markets expectations.

High frequency economics said:

  • "No way supportive of a imminent move by the Fed to lower rates"

Peter Boockvar's Block Report commented:

  • "If the Fed continues to look for reason to cut, they didn't find one today, notwithstanding the rise in the unemployment rate, for reasons stated"

Rosenberg's research said:

  • "To repeat, this is the number that an inflation – centric Fed will be focused on – a data point here that takes a July cut off the table for sure, and likely September as well. That is, barring more really good news on CPI and PCE deflator fronts (as in 0.2% or lower)"

CItibank now sees a September drop versus a July drop prior.