Today's data undermines the message that other recent economic data have been giving of a cooling U.S. economy, and slams the door shut on a July rate cut,” Seema Shah, chief global strategist at Principal Asset Management.
Payrolls increased by 272,000 in May, led by strong hiring in health care, government, and leisure and hospitality. Wages rose 0.4%, up 4.1% over the last 12 months, potentially outpacing inflation.
Treasury yields surged post-report, reflecting reduced bets on Fed rate cuts. Two-year Treasury note yield spiked to 4.85%, signaling market response to the data.
Strong payroll numbers raise the threshold for Fed to cut rates, with analysts highlighting the challenge in seeing desired inflation slowdown, per Evercore ISI analysts.
#fed-rate-cut-expectations #job-and-wage-growth #inflation-outlook #market-response #economic-data-impact
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