The U.S. economy added 223,000 jobs in May, beating economists’ expectations and exceeding the previous month’s gain. The unemployment rate dropped to 3.8%, the lowest level since April 2000. Hourly wage growth improved by 2.7% year over year. According to economists, the strong jobs report should keep the Federal Reserve (Fed) on target for a rate hike in June and will likely increase the number of forecasted hikes before year-end.
Retail sales rose by 0.3% in April as consumer spending weakened after an already-soft start to the year. Robust gains in furniture, clothing and non-store retailers were mitigated by a fallback in restaurants and sporting-goods sales. Analysts said that higher gasoline prices limited the benefit of recent tax reform that increased take-home pay for consumers.