U.S. job creation exceeds forecasts, signals delays in rate cuts

by LaDonna Azagra

In May, U.S. job creation surged past expectations, adding 272,000 jobs compared to the anticipated 180,000. This robust performance, coupled with April's revised figures of 160,000, underscores the economy's resilience and recovery momentum. The strong jobs report has shifted expectations for Federal Reserve policy, with markets now predicting the Fed will likely maintain current benchmark interest rates at its upcoming June meeting rather than pursuing anticipated rate cuts. This sentiment is reinforced by the CME Fed Watch Tool, which indicates a 99.4% probability of unchanged rates.

Following the jobs data, the 10-year U.S. Treasury yield rose to 4.42%, pushing the 30-year fixed mortgage rate to 7.2%. These developments suggest that mortgage rates may remain elevated, impacting housing market dynamics and affordability. As investors and analysts monitor economic indicators for further insights, the focus remains on how sustained job growth will influence broader economic stability and monetary policy decisions in the months ahead.