May’s US jobs report blew past expectations with another 272,000 jobs added during the month.
Analysts were expecting the economy to add somewhere around 185,000 jobs.
However, the unemployment rate rose slightly to 4% from 3.9% in April.
Wages increased by 4.1% year over year, reversing a previous downward trend, with a 0.4% monthly rise compared to the prior month's 0.2% gain.
Job openings fell to their lowest since February 2021, indicating a labor market moving towards pre-pandemic norms.
A surprise to the upside will likely fuel some recovery action in the US dollar and weigh on oil prices, analysts at TickMill Group noted.
Despite today's job data, the Fed is not expected to cut rates in its upcoming meeting but may indicate one or two rate cuts later in the year, a reduction from earlier expectations of three cuts, according to Ipek Ozkardeskaya at Swissquote.
Ozkardeskaya noted that expectation is “mostly priced in and could be the peak hawkishness for the Fed this year – if the economic data continues to disappoint.”