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Unemployment Up To 4% In Conflicting Report That Shows More Jobs, Fewer Working

Conflict: More Jobs, Fewer Working

The May jobs report showed that hiring easily topped expectations, as employers added 272,000 payroll positions, even as the unemployment rate hit 4% for the first time in more than two years. After the jobs report, S&P 500 futures moved lower as Wall Street weighed the implications for Fed rate cuts.

Wall Street’s initial reaction to the jobs report seemed to be one of confusion as the strong establishment survey data clashed with a weak household survey. However, the Fed is likely to pay more heed to the evidence of strength as it updates rate cut projections next week.

The headline job and wage figures come from the Labor Department’s monthly survey of employers. The separate household survey details labor force participation, work status and the unemployment rate.

The household survey comes with a higher margin of error than the employer responses, so monthly changes should be taken with a grain of salt. However, the household survey has been known to lead the employer survey at economic turning points, so it shouldn’t be ignored.

The unemployment rate rose to 4%, defying predictions of a steady 3.9% rate.

That came as the ranks of the employed tumbled by 408,000. Meanwhile, the ranks of the unemployed increased by 157,000.

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