by Matthew Rusling
WASHINGTON, June 8 (Xinhua) -- Newly released U.S. jobs report was strong but spelled bad news for record-high inflation and interest rates.
The U.S. economy added 272,000 nonfarm payroll jobs in May, soundly beating analysts' expectations of 180,000, according to data released Friday from the Bureau of Labor Statistics.
"It was another very strong report ... Wages grew at a 4.1 percent annual rate over the last three months, the same as the last year," Dean Baker, a senior economist at the Center for Economic and Policy Research, told Xinhua.
HIGH INFLATION, INTEREST RATES
In ordinary economic times, a strong labor market is welcomed by all. But as inflation -- particularly prices of food, energy, homes and rent -- stands at levels not seen in decades, Friday's stronger-than-expected jobs report is good news for workers, but bad news for their wallets.
This is particularly the case among young people and low-income earners.
"Everything is expensive, especially food," Janice Jones, a 20-year-old student, told Xinhua in a coffee shop in Washington DC.
In last month's consumer sentiment report carried out by the University of Michigan, inflation expectations increased.
Participants' one-year inflation outlook increased 0.3 percent from the previous month to the highest level in six months.
The five-year outlook increased only 0.1 percent but reversed a months-long trend of lower estimates for inflation.
Joanne Hsu, director of the consumer sentiment survey, said consumers expressed worries that "inflation, unemployment and interest rates may all be moving in an unfavorable direction in the year ahead."
The jobs report was also bad news for interest rates, according to some economists.
"Stronger than expected jobs numbers make it highly unlikely that the Fed will cut interest rates next week at its policy meeting," Desmond Lachman, a senior fellow at the American Enterprise Institute, told Xinhua.
With unemployment still close to a 50-year low and inflation proving to be stickier than expected, the Fed will feel it lacks assurance that a rate cut will not endanger its mandate of 2 percent inflation, Lachman said.
As the Fed will not want to risk being charged with having a political motivation, the chances of a rate cut before the November election are also lessened, Lachman said.
POLITICAL OUTCOME
As Americans head to the polls in November, the high cost of rent, home ownership, food and other items -- which has surged since the previous elections -- will be on their minds.
For the third year in a row, the percentage of Americans naming inflation as the most important financial problem facing their family has reached a new high of 41 percent, up from 35 percent a year ago and 32 percent in 2022, according to a Gallup poll released last month.
Brookings Institution Senior Fellow Darrell West told Xinhua earlier that inflation is giving opposition candidate and former President Donald Trump, who is mired in lawsuits, an opportunity to criticize President Joe Biden.
Currently, the bombastic billionaire is leading Biden in all of the key battleground states -- Wisconsin, Arizona, Georgia, Michigan, Pennsylvania, North Carolina and Nevada, according to the latest Real Clear Politics poll averages. ■