- Non-farm payrolls rose by 224k in June, well ahead of expectations for 160k. Private-sector hiring expanded by 191k and government payrolls kicked in 33k.
- Goods-producing employment rose 37k, with 21k in construction and 17k in manufacturing. Services employment, meanwhile, rose 154k, more than double the 72k created in May.
- Revisions were relatively minor, with 11k fewer jobs created over the previous two months relative to the previous estimate.
- The unemployment rate edged up to 3.7% from 3.6% May, due to relatively strong labor force growth (335k) and an increasing participation rate (62.9% from 62.8%). Household survey employment rose 224k.
- Average hourly earnings were up 0.2% month-on-month, but the trend for growth over the past year edged lower to 3.1% (from 3.2%).
Key Implications
- So much for the slowing job market narrative. After a scare in May, job growth returned to form in June. Continued above-trend growth belies concerns that the American economy is turning over.
- At 3.7%, unemployment is low, but don’t expect Fed officials to get too excited about it as long as inflation is soft and nominal wage growth is showing little signs of accelerating. Still, while an insurance cut may be on the table, this isn’t the kind of data that portends the start of an easing cycle.
