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US DATA
A couple of less-watched areas of the Household portion of the May employment report that have been cited as important by the FOMC add to the overall mixed interpretation:
- Looking at demographics, which have been cited by Powell as an important gauge of labor market health, May saw a large drop in Hispanic/Latino unemployment (0.4pp to 4%), but also the largest increase in the Black/African American unemployment rate since April 2020: 0.9pp to 5.6%, almost fully reversing the reversing the 1.0pp drop the previous two months. (Notably Powell said earlier this year that "when unemployment goes up quickly in a recession, it goes up much faster for African Americans...that's somehow bedded in our economy.)
- While the participation rate overall remained steady at 62.6% for the 3rd straight month, potentially signaling labor markets hitting constraints, within the figure was a mixed picture. Prime-Age participation (25-54 year olds) ticked up to a fresh 16-year high of 83.4%. But for those aged 55+ - whose participation dropped sharply post-pandemic - participation remained steady at 38.4%, remaining down from the 40.3% in Feb 2020 and showing no signs of older Americans returning to the workforce. Overall there is little here to suggest that there is much wage moderation in the pipeline from increased labor supply.
Source: BLS
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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