Jobs report gives labor market a yellow card

Today's June jobs report shows a labor market losing momentum. Payrolls added just fifty-seven thousand jobs—roughly half what economists expected. Prior months were weaker too, with revisions cutting reported gains by seventy-four thousand combined. The three-month average is now one hundred eleven thousand, down sharply from one hundred sixty-four thousand in May. Here's the concerning part: fewer Americans are working and fewer are looking for work. Household employment fell by five hundred seven thousand, while seven hundred twenty thousand people left the labor force entirely. The unemployment rate ticked down to four point two percent, but mainly because people stopped searching, not because jobs were plentiful. Prime-age workers—those twenty-five to fifty-four—saw the biggest retreat, with labor force participation sliding zero point six percentage point, the largest one-month drop outside the pandemic in at least a decade. One bright spot: wages. Average hourly earnings rose zero point three percent in June and are up three point five percent year-over-year. According to Axios, the report leaves policymakers with uncertainty: is this a temporary pause or the start of a slower labor market phase? The Federal Reserve is watching the three-to-six-month trend, and markets still see roughly a seventy-eight percent chance of rate hikes by year-end.

Listen to this story

Hear this and more stories in a personalized audio briefing.

Open The Chonkerton