May Non-Farm Payrolls Beat Expectations but Growth Rate Slows, Fed Rate Cut May Be Delayed

On Friday, June 6th, the U.S. Bureau of Labor Statistics disclosed data indicating that nonfarm payrolls rose by 139,000 in May (revised downward from 147,000), surpassing the market's anticipation of 130,000. Due to the influence of trade policy uncertainty, the growth of employment continued to decelerate, and the unemployment rate remained at 4.2% for three consecutive months. This might offer the Federal Reserve with policy room to postpone the rate cuts. The U.S. economy requires the creation of approximately 100,000 jobs each month to keep pace with the growth of the working-age population. With U.S. President Trump revoking the temporary legal status of hundreds of thousands of immigrants during his immigration crackdown, this figure may decline. The majority of this year's job growth reflects the uncertainty regarding tariffs as Trump wavers, and companies are stockpiling workers. Economists state that this has restricted businesses' ability to make long-term plans. The opposition from hardline conservative Republicans in the U.S. Senate and Musk to Trump's tax cuts and spending bill has introduced an additional layer of uncertainty for businesses. Employers are reluctant to lay off workers, which may cause the Fed to adopt a wait-and-see attitude until the end of the year. Financial markets anticipate that the Fed will maintain the benchmark overnight rate within the range of 4.25%-4.50% this month and resume an accommodative policy in September. (FXStreet)