The June Jobs Report: What You Need to Know
The Big Picture: New data from the Labor Department show that employers boosted nonfarm payrolls by a stronger-than-expected 132,000 jobs in June. Even better, 75,000 more jobs were added in April and May than first thought, bringing the three-month average to 148,000. The unemployment rate held steady at 4.5 percent for the third straight month. Big jobs growth came in healthcare (up 43,000), government (up 40,000), and hospitality (up 39,000). Manufacturing lost 18,000 jobs, while home construction was flat. Non-residential construction, including specialty trades, added 10,000 jobs.
Five Fun Facts: 1) The unemployment rate for college graduates was 2.0 percent vs. 4.1 percent for workers who are just high school grads; 2) Voluntary job leavers jumped by 46,000 to 810,000, perhaps showing more worker confidence; 3) The labor force participation rate edged up to 66.1 percent from 66.0 percent, meaning more people joined or rejoined the working world; 4) Hourly earnings rose 0.3 percent for a year-over-year rate of 3.9 percent; 5) An average of 145,000 net new jobs have been created per month this year vs. 189,000 last year.
What the Pros Think:
Haseeb Ahmed, U.S. economist, JPMorgan Chase: "The Fed will be quite pleased with the state of the labor market. It will also be comfortable with the current trend in core inflation and the fact that the economy enters 3Q with strong forward momentum...even as the housing market has yet to find a floor."
Brian Wesbury, chief economist, First Trust Advisors: "Today's jobs report was bullish on the economy....When combined with the strong ISM reports for both manufacturing and services (released earlier this week), the strong employment report for June suggests that the economy has emerged from its slow-growth patch and has regained its strong forward momentum."
Peter Morici, business professor, University of Maryland: "This is hardly a stellar performance. Thanks to a dollar overvalued against the Chinese yuan, Japanese yen, and other Asian currencies...the job market is great for highly skilled professionals, and their stock holdings will continue to soar. Meanwhile, ordinary working Americans continue to bear the greatest burdens of globalization—wages that lag inflation and a lousy job market."
Nigel Gault, U.S. economist, Global Insight: "Gains in employment and real wages should ensure that consumer spending revives in the second half of the year after a weak second quarter, when it was hit by high gasoline prices. The economy remains pretty much where the Fed wants it, with growth reviving and core price inflation edging lower, suggesting that the Fed can remain on hold for a long time."