Strong US job growth extends into second consecutive month – NFP

US nonfarm payrolls increased by 172,000 jobs in May after rising by 179,000 in April (upwardly revised from 115K) and doubled forecast for payrolls increase by 85,000 jobs.

Upbeat May numbers mark the second consecutive month of strong employment gains and add to signals that the US labor sector continues to strengthen after facing difficulties during the last year.

The unemployment rate remained at 4.3% for a third straight month, while average earnings fell from 3.6% in April to 3.4% last month, in line with expectations, that eases inflationary pressure concerns.

Another solid labor data in May was mainly driven by low layoffs, as fiscal stimulus has boosted corporate profits and allowed businesses to refrain from large-scale firings, while persisting uncertainty, first from President Donald Trump’s import tariffs last year and lately the US-Israeli war with Iran that kept businesses cautious about boosting hiring.

Economists expect the labor market to remain in slow-hire, slow-fire mode for some time, despite recent better than expected numbers, as overall situation remains fragile, with full negative impact from the war in the Middle East, still to be seen.