Fed intends to hold rates steady as US labor market cools

The US labor market showed signs of cooling in May, with employers adding 139,000 jobs, Reuters reports. While this figure indicates a moderation in labor demand, it was solid enough to reinforce the Federal Reserve's strategy of keeping interest rates unchanged. The unemployment rate in the US held steady at 4.2%.

Despite President Donald Trump's call for a full-point rate cut, Fed officials appeared satisfied with the employment report and signaled their intention to keep monetary policy on hold at the upcoming June meeting, the agency noted.

Market participants are now expecting the first rate cut in September and a second one in December, though the likelihood of a third cut this year has diminished, according to Reuters.

Analysts quoted by the agency forecast further labor market weakening. May's job gains were concentrated in fewer industries, while manufacturing posted its worst job losses since January.