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07/05/2024 |

The June Jobs Report Has Arrived

This is a histogram of the jobs report numbers over the past year.

Key Takeaways

  • Employers added 206,000 nonfarm payrolls in June.
  • Unemployment hits 2.5-year highs.
  • Wage growth cooled slightly to 3.9% year-over-year.
Robust Job Growth, Rising Unemployment, and Easing Wage Growth

Today, the Bureau of Labor Statistics released the June jobs report, revealing that employers added 206,000 nonfarm payrolls, exceeding economists’ expectations of 189,500 jobs. This robust job growth highlights continued strength in the labor market, though it marks a slowdown from May’s revised gain of 218,000 jobs. However, revisions for April and May showed U.S. employment in those months was a combined 111,000 lower than previously reported, indicating some volatility in the employment data.

Despite the strong job growth, the U.S. unemployment rate rose to 4.1% in June, up from 4% in May, the first time it has exceeded 4% since November 2021. Wage growth eased slightly, with average hourly earnings rising by 3.9% year-over-year, down from 4% in May, and monthly growth of 0.3%, consistent with expectations.

The Fed’s View

The Federal Reserve closely monitors wage trends due to their impact on inflation, particularly in the services sector. While the slight cooling in wage growth is seen as a positive step towards the Fed’s 2% inflation target, the mixed signals from rising unemployment and strong job additions present a complex picture of the labor market’s health.

All eyes will be on Powell and company when they reconvene for the next FOMC meeting at the end of this month (July 30th & 31st). Currently, the CME’s FedWatch tool is projecting just a 4.7% chance of a rate cut at this month’s meeting, still placing the strongest odds of the first .25bps cut to occur in September.