Alvin Liew, Senior Economist at UOB Group, assesses the latest publication of US Nonfarm Payrolls.

Key Takeaways

“US job creation again exceeded expectations with 253,000 jobs added in Apr while the jobless rate receded to the multi-decade low of 3.4% (Mar: 3.5%), as the unemployed numbers fell by 182,000 to 5.7 million and participation rate held at 62.6%. Wage growth pace was also above forecast, and faster than the previous month, at 0.5% m/m, 4.4% y/y.”

“After the 25-bps hike in the May FOMC, we had assigned a high probability the Fed will pause thereafter. We continue to expect no rate cuts in 2023, with the FFTR terminal rate at 5.25% lasting through this year.”

“Admittedly, the US Apr job creation, unemployment rate and wage growth were stronger than expected, which highlight the resilience of US labor market despite the aggressive Fed rate hikes and put doubts on the call that the Fed have reached a pause.”