Friday’s payrolls announcement was always going to be overshadowed by the noises out of the European Central Bank’s meeting in Frankfurt. After all, it’s not every day that a central bank launches a negative interest rate policy. That being said, for us US watchers, the report did provide us with some interesting things to think about.

Firstly, the recovery is still ongoing obviously. A print of 217,000 jobs in May was the 4th consecutive gain over 200,000 and the 8th in the past year. The fall from April’s reading of 288,000 was expected as the effects of the winter bounce back started to wane; a natural event after the hiring tightness through Q1. May’s number does bring the 12 month average to 198,000 – the highest in 6 months as well.

Secondly, the close on 9 million jobs that were lost during the global financial crisis and the ensuing recession in the United States have been made back. The rate that these jobs were recouped was, of course, painfully slow. Put alongside the increases in those looking for jobs and the increase in the number of people in the workforce, we are left with a higher unemployment rate than at the pre-recession peak.

Thirdly, the job gains within this report were fairly broad based. Professional services added 55,000 positions, healthcare increased by 34,000 with the more hospitality side of the services industry adding 32,000 positions. As the slack in the US jobs market starts to be reduced then average wages should start to increase throughout these sectors. This month’s average hourly earnings increased by 0.2% m/m, pushing the annual growth rate up to 2.1% but until we start to see this make an impression on inflation then the impact is negligible.

The US dollar hardly reacted in the aftermath of the report but we are looking for the ongoing improvement of the US jobs market – in particular that of wages – in the second half of the year to help the greenback out.

Have a great week