The market continued to digest the jobs report. CIBC noted that the household survey tends to be more volatile and less reliable month-to-month and the 310,000 drops in jobs was a stark contrast to the establishment survey at +339,000.
However, year-to-date comparisons suggest the household survey has added 1.9 million jobs compared to 1.6 million in the payroll report, indicating the May report could be a correction for previous over-reporting.
The total participation rate remained constant, while the prime-age participation rate exceeded its pre-pandemic peak. They say the latter trend may persist as Americans with depleted savings and affected by inflation might be prompted to seek income.
In a separate note, BMO highlighted that any time the unemployment rate rises 0.3 percentage points from the low, it tends to rise a further 1.5-3.0 percentage points.
Fed watcher Nick Timiraos also published his take of the report on the Wall Street Journal. He noted that Friday’s jobs report does little to clarify the Federal Reserve’s debate over whether to hold rates steady this month.
But it underscores the prospect that, if officials do so, they could favour raising rates later this summer. He notes that those who already favoured a rate rise in June are likely to be more convinced of the need while those who want time to assess could still lean towards skipping a June hike.