June Jobs Report: According to the new June jobs report also known as the Employment Situation Summary, released by the U.S. Bureau of Labor Statistics (BLS) for June, United States employers added 209,000 jobs, coming in below 225,000 jobs expectations that economists did forecast for June and also below the 339,000 jobs created in May.
The 209,000 jobs report has created optimism that the economy is on course to nail that elusive soft landing of lowering inflation without triggering a recession since the US job market cooled back down in June.
What is The Jobs report?
The jobs report which is usually released on the first Friday of every month is based on surveys of households and employers. It usually estimates the number of people on payrolls in the United States economy, the average number of hours they worked weekly, as well as their average hourly earnings.
The jobs report provides estimates by state and metropolitan area, and by industry. The report also tallies the hours worked and earnings of production and non-supervisory employees.
Layoffs in June
Before the release of the June Jobs Report, in less than five months countless companies such as Bed Bath & Beyond laid off about 1,000 staff, massive job cuts at Walmart, Glassdoor, Amazon cutting 9,000 jobs across its global business, Facebook’s parent company, “META” reporting 11,000 job cuts, Citigroup, Twitter is in the list of big companies that laid staffs off, just to mention a few who have all fired staffs to cut excess expenses.
What are Economists Saying?
Economists believe that this report is the lowest monthly gain and smallest since December 2019 excluding the losses seen during the first year of the pandemic. That being said, June month’s jobs still outpace the pre-pandemic average.
Economists see this as a tug of war between the labor market and the economy, there is still a push and pull, and the labor market remains strong. According to Economists, job growth is slowing, but they don’t think that’s necessarily a bad thing. In some ways this is great. The country is beginning to see the soft landing that the Feds are hoping for.
Summary of the June Jobs Report
The unemployment rate ticked down to 3.6% from 3.7% the month before, according to the report. The overall labor force participation rate was unchanged for the fourth consecutive month at 62.6%, but more women are working than ever before. According to the CNBC reports, the participation rate for women between 25 and 54 years old climbed to an all-time high of 77.8%, continuing a record-breaking streak.
The US gained 209,000 jobs in June and 30% of all that was government jobs.
- Gov +60,000
- Healthcare +41,000
- Social assist +24,000
- Construction +23,000
- Biz +21,000
- Hospitality +21,000
- Transport/Warehouse -7,000
- Retail -11,000
- Temp help -13,000
How will the Fed react to the June jobs report?
According to Reuters economic analysts, June job gains were moderate while wage growth remained firm, showing a strong enough labor market to keep the Federal Reserve on track to raise interest rates this month. The Fed is likely to resume its series of rate hikes at its meeting later this month, following a pause in June.
But parts of the report, including stronger-than-expected wage numbers, heightened fears that the Fed may have reason to resume hiking later this month. Average hourly earnings increased by 0.4% in June and 4.4% from a year ago. Meanwhile, the unemployment rate declined from 3.7% in May
How Investors are reacting
Stocks fell on Friday, and finished lower for the week, as Wall Street struggled to shake off fears that the Federal Reserve may start hiking rates again later this month. Investors are hoping next week’s release of the June consumer price index on Wednesday, as well as last month’s producer price index on Thursday, will hopefully indicate a downward trajectory in inflation after this week’s strong ADP data spurred investor fears of further rate hikes ahead.
Investors are turning their attention to inflation data in the week ahead, following this week’s hot jobs data, to further clarify the path of future monetary policy.
