The Digest will not be published on Monday, May 25th due to a personal matter. We will resume on Tuesday.

Back to Index

1. Nonfarm payrolls rose for a third consecutive month in May, well above consensus estimates.

– Data for the previous two months were revised up by a combined 93,000.

– The three-month average job gains have risen sharply.

– Payroll growth increased the most in leisure and hospitality and local government, perhaps reflecting an early impact from World Cup hiring.

– Sectors with high AI adoption continued to shed jobs, in sharp contrast to the rest of the private sector.

– Goldman’s estimate of underlying trend job growth has risen to 131,000, above the break-even rate.

• Unemployment rate held steady at 4.3%.

– On an unrounded basis, the unemployment rate fell slightly.

– Here is a rough attribution of how the unemployment rate has changed.

– The civilian labor force participation rate held steady, although participation rate for 25- to 54-year-olds ticked up.

– The underemployment rate (U6) declined by 10 bps to 8.1%.

– Looking ahead, leading hiring indicators continued to weaken in May, with the NFIB hiring intentions index falling to its lowest level since May 2020.

• Wage growth eased year over year.

2. Used vehicle prices edged up in May.

3. US office vacancies continue to climb.

Back to Index

1. The stronger-than-expected jobs report growth prompted markets to fully price in a 25-basis-point Fed rate hike by year-end.

2. The Treasury yield curve bear-steepened.

• The 2-year yield surged to the highest level since February 2025.

– The 30-year yield is back above 5%.

• The 2-year/10-year yield curve is at the flattest level since April 2025, …

… while the 10-year/30-year curve is at the flattest level since June 2025.

3. Treasury STRIPS demand surged in May, with $11.6 billion of net stripping concentrated in long-dated bonds yields rose.

Back to Index

1. The labor market showed surprising strength in May as employment surged by 88,000, driven entirely by full-time positions.

• The unemployment rate declined.