WASHINGTON, April 28, 2021 – Photo taken on April 28, 2021 shows the Federal Reserve in … [+]
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The economy created 559,000 new jobs in May, which fell short of Street’s estimate by 671,000. Meanwhile, the unemployment rate slipped to 5.8%, below the Street estimate of 5.9% and below April’s 6.1% figure.
The report also showed that we still have 7.6 million jobs below the February 2020 high. The major industries that grew the most were leisure / hospitality, public and private education, and health and welfare in May.
It is important to note that due to government subsidies, supply shortages, higher inflation and concerns about capacity production, many workers are still staying at home.
With the number of jobs missing estimates in both April and May, the US Federal Reserve is likely to have relieved pressure to curb its bond-buying program. Remember that the Fed has a dual mandate: to promote employment and to keep inflation close to 2%.
If the labor market data were stronger than expected, it would have put pressure on the Fed to end its contingency measures earlier than originally expected. Right now, the Fed has a long way to go to keep printing money, and that tends to be bullish on stocks and other “asset” prices.