Episode summary
Instant Reaction: US Adds 172,000 Jobs, Boosting Bets on Fed Rate Hike by Year-End | Bloomberg...
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Claudia Sahm, Kevin Gordon, Kristina Campmany
Summary
May payrolls rose 172,000, far above the 88,000 estimate, while unemployment held at 4.3% and average hourly earnings rose 3.4% year over year. The hosts and guests treated the report as a clear sign of labor-market stabilization rather than an inflation scare, because wage growth is still slowing and has not produced the kind of second-round price pressure the Fed worries about. The immediate market response was higher Treasury yields and a stronger case for the Fed to stay on hold longer, with traders rethinking the odds of a year-end rate hike.
Key takeaways
- The labor report was stronger than expected, with 172,000 payroll gains versus an 88,000 estimate and a steady 4.3% unemployment rate.
- Claudia Sahm argued the data are not inflationary because wage growth is still moderate and not feeding second-round price pressures.
- Kevin Gordon said market breadth remains weak even as AI and semis drive indexes, which supports a diversification case.
- Kristina Campmany said the market is pricing more hawkish Fed risk again, but she does not see conviction behind a full hiking cycle.
- Campmany preferred shorter, higher-quality credit and saw more value in the front end of rates curves, including outside the U.S.
Notable quotes
“We added 172,000 jobs. This is blowing away estimates of 88,000 even the whisper number which was for 99,000”
“this isn't such a worrisome print in that wage growth was still pretty moderate. We're still seeing slowing in wage growth”
“the Fed is not anti-jobs. They're anti-inflation, right”
“the average stock, when you look at the percentage of companies above their 200-day moving average, when you look at percentage of companies outperforming the S&P 500”
“I think the market is grappling, whereas other global central banks, like we expect the ECB hikes next week”
How the episode opens
Bloomberg audio studios podcasts radio news — This is a breaking news update from Bloomberg instant reaction and analysis from our 3000 journalists and analysts around the world.
And the May unemployment report hitting the Bloomberg terminal and it shows a big jump in the number of jobs added to this economy in the month of May. We added 172,000 jobs. This is blowing away estimates of 88,000 even the whisper number which was for 99,000 and this is compared to the 115,000 jobs we added in the prior month are going through this report.
We've got the unemployment rate holding steady at 4.3%. That was expected as for average hourly earnings. Not much movement there at all up 3.4% right in line with estimates and a bit lower than the month prior when when we saw that move up 3.6% so again wages not keeping pace with inflation which is now at 3.8% and we have got also want to take a look at the labor force participation rate again in line with estimates at 6.61.8% so unchanged from the prior month but again the headline number here the economy adding many more jobs than expected 172,000 in the month of May.
The estimate was for 88,000 the unemployment rate holding steady at 4.3% and that's a look at the May jobs report Tom and Paul.
Alexis thank you so much Bloomberg surveillance on this jobs day across this nation brought you by IBKR for the past 3 years interactive brokers individual clients average 24.3% annually beating the standard and poor's 500 lower cost and access to 170 plus global markets it matters. Visit ibkr.com/performance. So Paul I go to the yield space you got to off this.
Yep. It's a jump condition, five basis points, 452 on the 10-year, 5.01 on the 30-year bond.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us jobs report
- fed rate expectations
- nonfarm payrolls
- unemployment rate
- labor market earnings
Companies and tickers mentioned
- SCHW
- IVZ
- Charles Schwab
- Invesco
- New Century Advisors
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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