Slightly Slower Pace of Growth, Higher Unemployment
Jobs Growth
New employment delivered 206,000 new jobs in June, essentially on par with the prior month, following a revision from 272,000 to 218,000 in May. Monthly jobs growth averaged 220,000 over the prior 12 months.
Top Industries
The most significant hiring activity was recorded in the government, healthcare, social assistance and construction sectors.
Unemployment
The unemployment rate edged up slightly in June, reaching 4.1%.
Wages
Average hourly earnings increased 0.3% in June, contributing to a gain of 3.9% over the past 12-month period.
Work Week
For the third month in a row, there was no change in the average work week, which remained at 34.3 hours.
Temporary Job Trends
There was a loss of 49,000 temporary jobs in the month of June.
What Does It All Mean?
Employment activity remains strong, although the pace of growth has moderated somewhat. That said, jobs creation of 206,000 closely matches the solid pace exhibited pre-pandemic. There is nothing to complain about here, other than a possible return to less frenetic times. That moderation is also evident in other surveys that track labor market signposts that include job quits and starts, unemployment levels, wages and business hiring plans.
The unemployment rate exceeded 4% for the first time since November 2021. One possible cause: increased levels of immigration and an influx of immigrants to the
labor pool. That creates greater competition for jobs and greater choice and flexibility for employers.
Overall, any cooling in the labor market, combined with wage growth that outpaces inflation, offers the exact balance sought by the Federal Reserve as a means to create a non-recessionary, “soft landing” for the economy. That brightens prospects for an interest-rate cut in the near future.
As the myriad trend lines inch up or down, left or right, the bottom line for employers is a continuing need to identify the talent critical to optimal performance and growth. Finding and hiring that talent is always a highly competitive race, more a marathon than a sprint, but one that never ends. Maintaining the stamina and creativity to win is an elemental requirement for every organization.
Sources: U.S. Bureau of Labor Statistics, Staffing Industry Analysts, CBS, NBC, CNBC, Reuters, The New York Times, The Washington Post, MarketWatch.
