The labor market saw more strength than expected in May, but that doesn’t mean the Federal Reserve will hike short-term interest rates sooner. ‘We did beat expectations, but when we talk about underlying strength [in the labor market], I still think we have quite a ways to go before we can talk about a robust hiring sector,’ said Lindsey Piegza, chief economist at Sterne Agee. The economy added 280,000 jobs in May, according to the Bureau of Labor Statistics, beating the 220,000 jobs analysts at Econoday expected. Stocks fell on Friday morning, as investors worried that the Fed might push rates higher sooner, rather than later, as the labor market improves. Higher rates could threaten stock prices. ‘I don’t think the Fed will hike rates sooner on one month of data,’ said UBS economist Sam Coffin. Meanwhile, Piegza thinks the Fed will pull the trigger in 2016. ‘The Fed is going to be very persistent that they want to see continued strength in the labor market,’ she said. ‘We’re talking about several consecutive months of job creation above 300,000 jobs. We’re still not at a pace where we can talk about a very robust employment sector.’
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