Announced this morning, the economy added 206,000 jobs in June, more than expected and the previous month was revised lower. The Health Care and Social Assistance industry and Government jobs were relatively strong, while the Retail Trade industry and Temporary Help was relatively weak. The Unemployment Rate increased one-tenth to 4.1%, and the Labor Force Participation Rate was one-tenth higher at 62.6%. Average Hourly Earnings increased 0.3% in June, as expected, and grew 3.9% on an annual basis. In addition, Average Weekly Hours were 34.3, which is the same as the previous month.
Overall, there was another increase in payrolls in June, albeit with a revision lower to the previous month, coupled with a slight increase in the unemployment rate. The labor market is continuing to become more balanced. Increases in initial jobless claims over the past few weeks appear to be seeping into the monthly employment data. The Federal Reserve should take note of the rise in the unemployment rate, especially from the 3.4% low seen in early 2023. The speed at which the unemployment rate rises versus inflation measures moving lower to their target will be a key dynamic for the Fed’s policy moves in the coming weeks.
Following the release of the jobs report, the yield on the U.S. 10-year treasury fluctuates but ultimately ticks lower, and equity futures are higher as we head into the market open.
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