US jobs report: May 2023 review

The same story: a weakening trend, but the overall picture still remains relatively solid.

While the US jobs market continues to be in a weakening trend, May’s BLS employment data continues to show an employment market that remains relatively robust — further time will be needed for the US jobs market to weaken to a level that would see the Fed materially adjust its monetary policy stance.

Let’s unpack the details.

Beginning our review of the US jobs market with the unemployment rate, we can see that at 3.7%, unemployment remains historically low.

While relatively low by historical levels, zooming in to analyse more recent trends, shows that May’s rise in the unemployment rate took it to its highest level since October 2022.

In order to prompt more concern from the Fed, and a more nuanced approach to its monetary policy, the unemployment rate will likely need to show a clear upward trend, and break above 4.0%, which would represent a material weakening from the trough unemployment rate.