US May job report fuels dollar surge and bond‑yield rise

The US Labor Department reported that 172,000 jobs were added in May, far above the 85,000‑job consensus forecast. The unemployment rate held steady at 4.3%. Gains were strongest in leisure and hospitality (70,000 jobs), followed by health care and local government. Wage growth slowed to 3.4% year‑over‑year, below the 3.8% inflation rate.

Markets reacted sharply. Two‑year Treasury yields jumped to about 4.16%, pushing the dollar up roughly 0.4% against a basket of currencies. Equities fell, with the S&P 500 down about 1% and the Nasdaq Composite slipping 1.8% as high‑valuation tech stocks felt the impact of higher borrowing costs. Gold prices retreated from recent highs, while silver, platinum and palladium also saw selling pressure.

Analysts noted the data could tighten the Federal Reserve’s policy outlook. Cleveland Fed President Beth Hammack described the labor market as “roughly balanced” but warned that persistent inflation remains a concern. Some economists, such as Stephen Brown of Capital Economics, see the possibility of a couple of pre‑emptive rate hikes before year‑end. In Saudi Arabia, market commentator Prof. Hani Faiz Yusuf Hamad called the dollar’s rally a “temporary gain” rather than a lasting shift against gold, emphasizing that longer‑term economic fundamentals still support higher precious‑metal prices.