US Watch – US jobs report is no game changer

The non-farm payrolls report last Friday was a dramatic surprise to the upside, with jobs gaining by 2.5mn in May, compared to consensus estimates for a 7.8mn fall (ABN AMRO: -5mn). The unemployment rate officially fell to 13.4% (consensus: 19%; ABN: 18.5%) from 14.7%, although survey methodology issues means that the true unemployment rate was around 3pp higher, according to the Bureau of Labor Statistics. The main surprise in the data was in the timing – we had forecast net job gains to start in June rather than May, and the weekly jobless claims data had also suggested a continued fall in May.