US: Disappointing May jobs report - ING

Analysts at ING point out that the latest US jobs report showed that the jobs growth slipped to 75k, although importantly they think is more likely to be down to constrained supply rather than weaker demand for labour.

Key Quotes

“The manufacturing sector isn’t immune from the wider skill shortage issue that has swept through the jobs market. The NFIB small business survey suggests that almost 40% of firms have positions they cannot fill, while these firms cite labour quality as by far their single biggest problem.”

“In other words, a slower trend in jobs growth over coming months shouldn’t necessarily be interpreted as a sign of emerging weakness. Importantly, there are broad signs that these supply constraints are gradually translating into higher wage growth.”

“Average hourly earnings missed estimates but still rose by 0.2% on the month and there are also signs are having to offer a broader range of incentives to retain/attract staff.”

“In short, the latest jobs report still suggests the US economy is in relatively solid shape for the time being.”