Non-Farm Payrolls Instant Insight

Job growth in the month of May was decent but the personal income and PCE deflator data were not good enough for the US dollar to hold onto its gains. 157k US jobs were added to payrolls with only a minor 8k downward revision to the prior month.

Annualized average hourly earnings and weekly hours both ticked higher which indicates that there are enough people out there with jobs to keep the housing market from collapsing for another month. However personal income dropped 0.1 percent while the pce core deflator slowed to 2.0 percent from 2.1 percent. The negative spread between personal income and personal spending is only growing wider. On balance, this data keeps the Fed at status quo and is not strong enough to trigger a major dollar rally. Furthermore, Motorola, IBM and Dell all recently announced staff layoffs which suggests that this month’s labor market strength may not be replicated.