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The May employment report confirmed that the job market remains healthy,
with job creation showing signs of stabilizing after steadily slowing over the
last several years. A healthy labor market should continue to provide support for
the economy and consumer spending, and we may even see some acceleration as
fiscal stimulus provides incentives that may draw more people into the labor force and
encourage businesses to hire.


We are encouraged by stabilizing job growth; few economic indicators so strongly
represent quality-of-life improvement for the people behind the numbers. However, labor
activity tends to send late signals for markets, and the most important element of the
report was the absence of any real sign that the economy is in danger of overheating.
Despite building evidence of potential wage pressure, the small upside surprise in wages
was not enough to alarm markets, but it was likely enough to keep the Federal Reserve
(Fed) on track to hike rates at its next policy meeting on June 12 – 13.


View the full weekly market commentary here.


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