Updated: 05-Jul-24 09:20 ET
| June Nonfarm Payrolls |
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| Updated: 05-Jul-24 09:20 ET |
Highlights
- The June employment report did not convey a robust labor market in June. To be fair, it did not convey a weak labor market either. If anything, it conveyed a weakening labor market.
- The nonfarm payrolls increase (206,000) looked good, but that strength gets watered down when taking into account that private sector payrolls, which exclude government hiring, were up just 136,000. Furthermore, there was a moderation in year-over-year average hourly earnings, and downward revisions to nonfarm payrolls for April and May combined translated to employment being 111,000 lower than previously reported.
Key Factors
- June nonfarm payrolls increased by 206,000 (Briefing.com consensus 185,000). The 3-month average for total nonfarm payrolls decreased to 177,000 from 212,000. May nonfarm payrolls revised to 218,000 from 272,000. April nonfarm payrolls revised to 108,000 from 165,000.
- June private sector payrolls increased by 136,000 (Briefing.com consensus 160,000). May private sector payrolls revised to 193,000 from 229,000. April private sector payrolls revised to 108,000 from 158,000.
- June unemployment rate was 4.1% (Briefing.com consensus 4.0%), versus 4.0% in May. Persons unemployed for 27 weeks or more accounted for 22.2% of the unemployed versus 20.7% in May. The U6 unemployment rate, which accounts for unemployed and underemployed workers, held steady at 7.4%.
- June average hourly earnings were up 0.3% (Briefing.com consensus 0.3%) versus 0.4% in May. Over the last 12 months, average hourly earnings have risen 3.9%, versus 4.1% for the 12 months ending in May.
- The average workweek in June was 34.3 hours (Briefing.com consensus 34.3), versus 34.3 hours in May. Manufacturing workweek was unchanged at 40.2 hours. Factory overtime remained at 3.0 hours.
- The labor force participation rate increased to 62.6% from 62.5%.
- The employment-population ratio held steady at 60.1%.
Big Picture
- The key takeaway from the report is that labor market conditions are softening, which will provide the Fed some cover to cut rates in September if it so chooses.
| Category | JUN | MAY | APR | MAR | FEB |
| Establishment Survey | |||||
| Nonfarm Payrolls | 206K | 218K | 108K | 310K | 236K |
| Goods-Producing | 19K | 12K | -3K | 33K | 15K |
| Construction | 27K | 16K | -5K | 37K | 24K |
| Manufacturing | -8K | 0K | 7K | -6K | -9K |
| Service-Providing | 117K | 181K | 111K | 199K | 166K |
| Retail Trade | -9K | 7K | 14K | 19K | 23K |
| Financial | 9K | 12K | -3K | 4K | -7K |
| Business | -17K | 31K | -17K | 17K | 6K |
| Temporary help | -49K | -16K | -24K | -1K | -16K |
| Education/Health | 82K | 81K | 98K | 76K | 80K |
| Leisure/Hospitality | 7K | 22K | -9K | 54K | 26K |
| Government | 70K | 25K | 0K | 78K | 55K |
| Average Workweek | 34.3 | 34.3 | 34.3 | 34.4 | 34.3 |
| Production Workweek | 33.7 | 33.8 | 33.7 | 33.8 | 33.7 |
| Factory Overtime | 3.6 | 3.6 | 3.6 | 3.5 | 3.6 |
| Aggregate Hours Index | 0.1% | 0.2% | -0.2% | 0.4% | 0.4% |
| Avg Hourly Earnings | 0.3% | 0.4% | 0.2% | 0.4% | 0.1% |
| Household Survey | |||||
| Household Survey | |||||
| Civilian Unemp. Rate | 4.1% | 4.0% | 3.9% | 3.8% | 3.9% |
| Civilian Labor Force | 277K | -250K | 87K | 469K | 150K |
| Civilian Employed | 116K | -408K | 25K | 498K | -184K |
| Civilian Unemployed | 162K | 157K | 63K | -29K | 334K |
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