US non-farm payrolls data for May slightly exceeded expectations, reinforcing the US Fed's "wait-and-see" stance.

On Friday, Eastern Time, data released by the US Bureau of Labor Statistics showed that despite consumers and businesses preparing for tariffs and a potentially slowing economy, the slowdown in non-farm payroll growth was not as severe as expected, providing the US Fed with policy room to delay interest rate cuts.

Specifically, the seasonally adjusted non-farm payrolls in the US in May recorded 139,000, the lowest since February and higher than the market expectation of 130,000.

The unemployment rate remained unchanged at 4.2% for the third consecutive month, which will allay concerns that the labour market is beginning to slow significantly.

Additionally, the increase in employment in May exceeded the median expectation, but the cumulative downward revision for the previous two months was 95,000, far offsetting the impact of the better-than-expected May figure.

The closely watched inflation barometer—average hourly earnings in May increased by 0.4% MoM, higher than the previous 0.2% and the expected 0.3%, and increased by 3.9% YoY, higher than the previous 3.8% and the expected 3.7%.

From an industry perspective, the healthcare sector once again led employment growth, creating 62,000 new jobs, even surpassing the average increase of 44,000 last year. The leisure and hospitality sector added 48,000 jobs.

On the downside, as the Department of Government Efficiency (DOGE), led by Musk, began cutting federal government employees and spending, the federal government lost 22,000 jobs in May, the highest since 2020.

In recent months, a series of economic policies announced by Trump, particularly his erratic approach to large-scale import tariffs, have shocked businesses.

Uncertainty about the scale and scope of tariffs has made it difficult for large enterprises to operate and plan: they do not know what their costs will be in three months, or even in three days; moreover, it has become more uncertain whether consumers will continue to spend.

The outlook has become increasingly unclear, and many of the largest publicly listed firms in the US have suspended their future earnings forecasts, leaving analysts and investors temporarily directionless. Small businesses, which have little room for error, are left in limbo.

Ger Doyle, President of ManpowerGroup North America, a human resources company, said that Friday's non-farm report painted a picture of a "stable but cautious" labour market, despite increasing economic uncertainty. "This is not a freeze, but a temporary cooling. Employees are choosing to stay put, employers are maintaining stability, and everyone is waiting for clearer signals."

Jeffrey Rosenberg, senior portfolio manager at BlackRock, commented that today's US non-farm payrolls data reinforced the US Fed's "wait-and-see" attitude. There are signs that employment growth momentum remains strong, but from an inflation perspective, wage increases are not enough to truly concern policymakers.

Peter Cardillo, chief market economist at Spartan Capital, said that while this month's non-farm payrolls data slightly exceeded consensus expectations and his personal forecast, the overall report, except for the hourly wage indicator, did not send a signal that the US Fed needs to intervene in the labour market. In fact, a 0.4% increase in hourly wages, while not significant, is notable enough to directly lock in the US Fed's wait-and-see stance.