The Day at a Glance | June 3 2022

 The Top 

 Employment increased more than expected in the United States during May (390k vs 315k e.). 

 Food prices decreased for a second consecutive month during May after reaching a peak in March: FAO. 

 OPEC+ will increase crude oil production (648 thousand daily barrels) in July and August; it hasn`t assured Russia`s oil will be replaced. 

 COVID-19 cases increased in Shanghai after mitigation measures were lifted. 

 Economic indicators: Services ISM will be made public in the US (56.4e.) after a positive surprise was logged in manufacturing activities. 

Economic environment 

The US labor market`s recovery became more moderate. The United States economy created 390 thousand new jobs, its lowest level since December of 2021. The figure set slightly above analysts` estimates (315k e.), however, it confirms moderation in the labor market`s growth. The largest number of created jobs were recorded among leisure and lodging, professional & business services, transportation and storage. The unemployment rate remained at 3.6% for a third consecutive month despite expectations of it decreasing to 3.5%. March`s figures were revised downwards (-30 thousand to 398 thousand), while April`s figures were revised upwards (in 8 thousand to 436 thousand). 6 million people are believed to be unemployed; versus 5.7 million in February of 2020, which points out that the labor market`s recovery after the pandemic is practically complete. The participation rate essentially remained unchanged during the month (62.3%). Lastly, wages met estimates and logged a 5.2% annual increase (0.3% monthly), a sign that wages aren’t putting pressure on inflation at the moment. Overall, the data reveals that the labor market remains strong with the creation of jobs being higher than the average seen prior to the pandemic; although the recovery has become more moderate. Markets expect the following figures to set close or even below 200 thousand, which would confirm the end of the recovery after the pandemic and an economic slowdown. If this doesn`t occur, expectations that the FED will have to do more to cool down the labor market could increase.