CIBC Research discusses its reaction to today's US jobs report for the month of May.
"Hiring picked up in the US in May as labor-intensive services added to headcounts and the unemployment rate fell. 559K jobs were created, and while that's an acceleration from the prior month's disappointment, it was 116K below the consensus expectation, and it still leaves over 7mn fewer Americans employed than prior to the pandemic. The underwhelming employment gain was driven largely by growth in the leisure and hospitality industry, while average wages rose by a strong 0.5% on the month as employers tried to attract workers. While the unemployment rate fell by a tick more than expected, to 5.8%, that was aided by a slight drop in the participation rate," CIBC notes.
"Our research suggests that generous unemployment benefit supplements have been the main factor holding employment gains back amidst record levels of job openings, but with many states moving to end the supplements in June, we expect millions of jobs to be added over the summer months. That would likely be enough to allow the Fed to announce at its September meeting a tapering of QE to start in early 2022," CIBC adds.