US: Solid employment report keeps Q2 activity elevated - Nomura

Analysts at Nomura note that the US nonfarm payroll employment increased 223k in May, slightly above their and market expectations (Nomura: +205k, Consensus: +190k).

Key Quotes

“Average hourly earnings surprised to the upside, increasing 0.30% m-o-m (Nomura: 0.22%, Consensus: 0.2%), raising the 12- month rate to 2.71%, from 2.56% in April. The unemployment rate fell further in May, from a high rounded 3.9% (3.929%) to a low rounded 3.8% (3.75%), below expectations (Nomura and Consensus: 3.9%).”

“The labor force participation rate declined 0.1pp to 62.7%, marking the fourth straight monthly decline. Overall, today’s report indicates that economic activity in Q2 remains elevated and labor markets continued to tighten.”