Assessment of Employment Statistics in the United States in May
2023-06-06
■The May employment statistics suggest a weak labor market and a slowdown in wage growth.
■It is expected that the policy interest rate will remain unchanged throughout the year, but it is also necessary to make adjustments based on price trends.
The May US employment statistics released by the US Department of Labor on the 2nd showed an increase of 339000 people in non-agricultural sector employment compared to the previous month. Extensive departmental growth, significantly exceeding market expectations (a year-on-year increase of 190000 people). However, there are also views that the average working time per week has been as short as 34.3 hours, which is the lowest level before the novel coronavirus disaster. Some people begin to be overcast about the intensity of labor demand. In addition, the unemployment rate has significantly increased from 3.7% to the previous month (3.4%), but the employment numbers in the household survey, which is the basis for calculating the unemployment rate, have a significant tendency compared to the non-agricultural sector employment numbers surveyed by the business sector. It is necessary to judge the increase in the unemployment rate. Considering the increase in the number of new unemployment insurance applications per week, the labor market should be interpreted as still solid. The average hourly wage increased by 4.3% year-on-year, which is slower than last month and market expectations (a year-on-year increase of 4.4%). The salary tracker calculated by the Atlanta Federal Reserve increased by 6.1% year-on-year in April, with a depreciation level starting from August 2022 (a year-on-year increase of 6.7%). Combined, the pace of wage growth seems to be slowing down slowly.
Given the current employment statistics, the market's view that the Federal Open Market Committee (FOMC) will temporarily suspend interest rate hikes on the 13th and 14th and that the July meeting will decide to raise interest rates by 25bps has been strengthened. Starting from the 3rd, FOMC participants have entered a period of stagnation in their financial policy statements, while cautious participants who support the June interest rate hike have also expressed the view that they cannot rule out the possibility of future interest rate hikes. The Bank will maintain the upper limit of the FF interest rate guidance target at 5.25% during the year but believes that it is necessary to revise the financial policy estimate according to the US consumer price index (CPI) in May published on the 13th and the participant economic and financial policy estimate (SEP) displayed by the FOMC in June, and pay close attention to these results.
■It is expected that the policy interest rate will remain unchanged throughout the year, but it is also necessary to make adjustments based on price trends.
The May US employment statistics released by the US Department of Labor on the 2nd showed an increase of 339000 people in non-agricultural sector employment compared to the previous month. Extensive departmental growth, significantly exceeding market expectations (a year-on-year increase of 190000 people). However, there are also views that the average working time per week has been as short as 34.3 hours, which is the lowest level before the novel coronavirus disaster. Some people begin to be overcast about the intensity of labor demand. In addition, the unemployment rate has significantly increased from 3.7% to the previous month (3.4%), but the employment numbers in the household survey, which is the basis for calculating the unemployment rate, have a significant tendency compared to the non-agricultural sector employment numbers surveyed by the business sector. It is necessary to judge the increase in the unemployment rate. Considering the increase in the number of new unemployment insurance applications per week, the labor market should be interpreted as still solid. The average hourly wage increased by 4.3% year-on-year, which is slower than last month and market expectations (a year-on-year increase of 4.4%). The salary tracker calculated by the Atlanta Federal Reserve increased by 6.1% year-on-year in April, with a depreciation level starting from August 2022 (a year-on-year increase of 6.7%). Combined, the pace of wage growth seems to be slowing down slowly.
Given the current employment statistics, the market's view that the Federal Open Market Committee (FOMC) will temporarily suspend interest rate hikes on the 13th and 14th and that the July meeting will decide to raise interest rates by 25bps has been strengthened. Starting from the 3rd, FOMC participants have entered a period of stagnation in their financial policy statements, while cautious participants who support the June interest rate hike have also expressed the view that they cannot rule out the possibility of future interest rate hikes. The Bank will maintain the upper limit of the FF interest rate guidance target at 5.25% during the year but believes that it is necessary to revise the financial policy estimate according to the US consumer price index (CPI) in May published on the 13th and the participant economic and financial policy estimate (SEP) displayed by the FOMC in June, and pay close attention to these results.