US: Labour Market report adds pressure on the Fed – Nordea Markets

According to Anders Svendsen, analyst at Nordea Markets, there is increased pressure on the US Fed to cut rates after the May Labour Market report showed big disappointment.

Key Quotes

“Nonfarm payrolls increased a mere 75k in May minus 75k in net revisions to the previous two months, significantly below consensus expectations around 185k.”

“The 3-month average payrolls is down to 150k, while the 12-month average remains closer to 200k.”

“The unemployment rate was unchanged at 3.6% in May, while the broad U6 unemployment rate dropped to 7.1% from 7.3% in April.”

“Average hourly earnings rose 0.2% m/m in May or the same pace as the month before.”

“Today’s numbers – together with the weak ISM manufacturing earlier this week – will add to the pressure on the Fed to deliver the first cycle cut in a not too distant future.”