Yahoo Finance Unemployment Rate Surges in June
While it would have been nice to enjoy a four-day weekend, we had some business to attend this morning. The June Employment Situation report from the U.S. Bureau of Labor Statistics (BLS), where 206K new jobs were filled in the past month. This is slightly above the 200K anticipated, but this tells only a small part of the story. Similarly, the Unemployment Rate has ticked up to +4.1% — the first time we’ve been above 4% since November 2021.
We’ll get to the breakdown of these figures in a moment. First, we would like to point out that revisions to the previous two months reached triple-digits: May’s original print of 272K has come way down to 218K, while April’s previous print of 165K is brought all the way down to 108K. So whereas the previous six-month average in nonfarm payroll gains was a robust 253K as of yesterday, this morning this comes way down to 222K today. Still growing, but cooling measurably.
What’s more, most of the job growth came from the government. Overall, Government jobs led the way by sector, +70K. Healthcare brought in +49K, Social Assistance was +34K and Education +7K. In all, 74% of all job gains last month came from this sector. Construction filled +27K positions and Hospitals +22K, but Professional/Business Services, which had routinely been one of the top job-growth segments, lost -17K positions. Temp hires dropped a precipitous -48K.
Most of the other figures came in as expected, and well-behaved. Wage Growth for the month was +0.3%, down 10 basis points (bps) from the +0.4% posted a month ago, and +3.9% year over year, down 20 bps from the prior +4.1%. This is the lowest year-over-year wage gain sub-headline since April of 2021. It’s also a good sign that inflation continues to be curbed, and does little to disrupt the narrative that the Fed may be ready to cut interest rates by September.
Elsewhere, Labor Force Participation reached 62.6% and the Average Workweek was 34.3 hours. These are also generally in-line with expectations, and allow broader narratives to continue. If there is one data point that seems a bit out of whack — aside from big downward jobs revisions — it is the U-6 line, aka “under-employment.” Here we see +7.4%, above estimates and the highest number we’ve seen since November 2021. Still, historically this remains within the bounds of reasonable expectations.
Pre-market futures improved slightly on this news. We had been down a tad on the S&P 500 — coming off a fresh all-time closing high on Wednesday — and the Dow, but these indices are now in the green, along with the Nasdaq, which also closed at all-time highs ahead of the Independence Day holiday. Bond yields are creeping up slightly at this hour — +4.296% on the 10-year and +4.635% on the 2-year — but remain happily well below the +5% threshold.
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