WASHINGTON—Friday’s jobs report – which showed only 138,000 jobs added in May – is still likely to keep the Federal Reserve on track to raising interest rates later this this month, said NAFCU Chief Economist and Director of Research Curt Long.
"The May jobs report was a disappointment as job growth failed to meet expectations and revisions reduced gains from prior months," said Long. "The participation rate fell, and wage growth showed no improvement.
As CUToday.info reported here, economists have had a mixed reaction to the latest economic news and what it could mean for rates.
"Despite the poor May returns, the Fed's view of the labor market remains strong enough to support a quarter-point rate hike later this month. But the slowing pace of job growth combined with still-muted wage growth may lead some officials to downgrade their expectations for further policy tightening in the second half of the year," Long added.
The Federal Open Market Committee’s next two-day monetary policy meeting is set for June 13-14.
In other report data, the unemployment rate decreased to 4.3% in May as 429,000 workers left the labor force. This marks the lowest unemployment rate since 2001, Long noted.
Average hourly earnings rose by four cents to $26.22 in May. Over the last 12 months, wages are up 2.5%. Since 2009, year-over-year wage growth has averaged just 2.2%, Long said.
WASHINGTON—Friday’s jobs report – which showed only 138,000 jobs added in May – is still likely to keep the Federal Reserve on track to raising interest rates later this this month, said NAFCU Chief Economist and Director of Research Curt Long.