US May Jobs Increase by 340,000 Exceeds Expectations, Deepening Fed's Dilemma

Despite Austerity, Market Expectations Greatly Exceeded
Unemployment Rate Rises... Wage Growth Slows Down

New job creation in the United States significantly exceeded market expectations, deepening the Federal Reserve's (Fed) dilemma.

The U.S. Department of Labor announced on the 2nd (local time) that nonfarm payrolls increased by 349,000 in May. This figure greatly surpassed the expert forecast of 190,000 compiled by The Wall Street Journal (WSJ). The median estimate from Bloomberg was 195,000, and Dow Jones projected 190,000. This indicates that despite aggressive tightening, the labor market remains robust.

However, despite the strong employment figures, the unemployment rate in May rose to 3.7% from 3.4% the previous month. Wall Street's forecast was 3.5%. The 3.7% unemployment rate is the highest since October last year (3.7%). While job gains exceeded market expectations, the unemployment rate worsened.

Average hourly earnings increased by 0.3% from the previous month and 4.3% year-over-year, aligning with expectations (0.3% and 4.4%, respectively). This suggests a slowdown in wage growth.

Attention is now focused on what decision the Fed will make at the Federal Open Market Committee (FOMC) regular meeting scheduled for June 13-14. The Fed has stated it will closely monitor the latest economic indicators until the final decision.