Yup. Wage growth has been outpacing inflation. That's A Good Thing.
... Key Takeaways
- - - US nonfarm payrolls increased by 139,000 in May, modestly above the 126,000 estimate, but down from April's 147,000.
- - - The unemployment rate held steady at 4.2%, matching April and reflecting a narrow range since May 2024.
- - - Average hourly earnings rose by 0.4% for the month and 3.9% yearoveryear, slightly above expectations.
- - - Fed futures now imply negligible odds of a June rate cut and have shifted the first expected cut to September (over 90% probability), reflecting a more resilient labor market.
The Bureau of Labor Statistics (BLS) reported that total nonfarm payroll employment rose by 139,000 in May 2025, slightly exceeding consensus expectations of 126,000 and marking a slowdown from April's revised gain of 147,000. The unemployment rate remained unchanged at 4.2%, highlighting the continued tightness in the labor market. Wage growth continued to outpace inflation, with average hourly earnings rising 0.4% over the month, and 3.9% yearoveryear, slightly stronger than forecasts.
However, revisions trimmed prior months' gains: March's figure was lowered by 65,000 (from 185,000 to 120,000) and April's by 30,000 (from 177,000 to 147,000).
Together, those cuts reduce the prior two-month payroll tallies by 95,000 jobs.
After factoring in these adjustments, the three-month average has fallen to 135,000 and the 12-month average now sits at 124,000 -- the lowest 12-month average since early 2023. ...
