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  • Writer's pictureRealFacts Editorial Team

Hot Jobs Report Causes Market Retreat

Hiring sign in a window

The May jobs report revealed a stronger-than-expected increase in hiring, with employers adding 272,000 payroll positions, surpassing the forecast of 182,000 by Econoday. Despite this, the unemployment rate rose to 4% for the first time in over two years. Following the report, the S&P 500 initially dropped but later recovered some losses as Wall Street considered its implications for potential Fed rate cuts. Private-sector employers contributed 229,000 new jobs, exceeding the expected 168,000, while government employment increased by 43,000. However, revisions to March and April hiring figures resulted in a combined decrease of 15,000 jobs.

Additionally, average hourly earnings grew by 0.4% in May, above the 0.3% estimate, and year-over-year wage growth reached 4.1%, beating the 3.9% forecast. Following this report, the odds of a rate cut fell. Jed Graham, Investors Business Daily author reported, “After the May jobs report, markets are pricing in 55% odds of a rate cut by the Sept. 18 Fed meeting, down from 67% ahead of the jobs data, according to CME Group's FedWatch page. Markets now see 51% odds of at least two quarter-point Fed rate cuts this year, down from 66%.” As the likelihood of rate cuts keeps getting delayed, investors should monitor how this impacts the market.


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