The US economy added a hefty 339,000 jobs in May, hotly-anticipated data released on Friday showed.

It was the largest monthly payrolls gain since January and the second-largest since late last summer.

Consensus was nowhere in the ballpark. The highest estimate from 76 economists surveyed was 250,000. I don’t know why they bother, frankly.

Unlike the prior month’s report, revisions were meaningfully positive. The headline prints for March and April were revised higher by a combined 93,000. Including those revisions, the US economy added 1.57 million jobs during the first five months of 2023.

Friday’s government data came 24 hours after a scorching-hot read on ADP hiring, which likewise topped every estimate. Private payrolls rose 283,000 in the NFP report, consistent with the ADP headline and easily ahead of the highest guess (253,000).

Gains were paced by professional and business services, government and health care. Leisure and hospitality added just 48,000 jobs, well below the 12-month average and nowhere near the ADP reading for the sector. Manufacturing shed 2,000 jobs in May.

There’s no use burying the lede: The report was amenable to a “Goldilocks” interpretation with an important caveat. I’ll speak to the Goldilocks points first.

The muscular headline was accompanied by a downtick in the monthly pace of wage growth, a slightly cooler-than-expected YoY read on average hourly earnings and a meaningful uptick in the jobless rate, to 3.7% from 3.4%.

The unemployment rate is now the highest since October. The participation rate was unchanged in May, at 62.6%. That’s low historically, but you can argue we’ve effectively reclaimed the pre-pandemic demographic trend.

Although the Fed would ideally like to see additional increases in the participation rate, the combination of (very) robust hiring, slower wage growth (on the margins, anyway) and a jobless rate which, while rising, still counts as extremely low in any historical context, was favorable for the soft landing narrative.

Now to the caveat. The household survey showed a 310,000 decline, the largest in 13 months. The number of unemployed rose 440,000, the most since April of 2020.

Although disparities between the headline NFP print and the household survey are hardly rare, they do tend to garner attention, particularly around ostensible turning points for the economy.

“History suggests anytime the UNR is >0.3pp off the 12-month trailing low, it tends to spike 1.5% to 3.0%,” BMO’s Ian Lyngen said Friday. “This implies an elevated degree of uncertainty as it relates to the divergence between the establishment and household data.”

Of course, you could spin that as a positive development to the extent it takes the hawkish policy edge off another large headline beat. Readers are free to draw their own conclusions.

Panning back out, you’re reminded that although the JOLTS report for April (released earlier this week) showed vacancies rose back above 10 million, the quit rate fell, consistent with a narrowing labor differential from the Conference Board’s confidence survey. May’s ADP report showed wage growth moderating sharply for so-called job “changers.”

I suppose you could suggest the Fed would prefer a slower pace of job creation at this point in the hiking cycle given that inflation is still running far too hot, but all in all, and notwithstanding the vexingly stubborn JOLTS headline, this week’s data was pretty favorable for policymakers.

It was (very) obvious from this week’s Fed speakers that the hawks aren’t going to prevail at this month’s FOMC meeting absent a big upside surprise from May’s CPI report. Thanks to the uptick in the unemployment rate, the in-line average hourly earnings prints and any ambiguity introduced by the decline on the household survey, Friday’s jobs report, strong as the headline was, won’t tip the scales back towards another rate hike.