Friday, July 8, 2022Nonfarm payrolls for June, issued this morning by the U.S. Bureau of Labor Statistics (BLS), came out ahead of expectations on the headline: 372K new jobs were filled last month, well beyond the 250-290K range analysts were expecting. The Unemployment Rate remained steady at 3.6% — the fourth-straight month at this historically low figure.
The private sector alone created 381K new jobs, led by Professional/Business Services at 74K, Leisure/Hospitality 67K. Healthcare 57K and Manufacturing — working its way back to pre-Covid levels — reached 29K last month. Score one for those economists who do not believe we are currently in a recession. What kind of recession brings in 380K new jobs per month over the past four months?
We did see downward revisions for the previous two months: May lightly dipped to 384K from 390K earlier reported, but April data came well off earlier tallies: 368K today versus 436K previously. Also, 500K+ jobs coming in per month during the Great Reopening, looks to be a thing in our rear view — at least until a new up-cycle buoys the economy, whenever that might be.
Average Hourly Earnings in June grew at the expected +0.3% rate, down a bit from the upwardly revised +0.4% in May. Year over year, we see a still-high +5.1%, though ebbing from the +5.3% we saw the previous month and +5.6% in March this year. Labor Force Participation, however, stayed disappointingly low at 62.2%. (Pre-Covid, we were registering 63.4% Labor Force Participation.)
Pre-market activity has been somewhat volatile since these numbers came out, with a downward bias. The Nasdaq is falling a bit harder than the Dow and S&P 500, but this may be in response to stronger gains in the tech-heavy index over the past few sessions. In any case, the indices have already come back a bit from the lows reached this morning on BLS numbers’ impact.
Before we get too analytical about whether a stronger-than-expected labor market with steadying wage growth should cause a market sell-off, let’s focus now on next week’s Consumer Price Index (CPI), which will be a more direct illustration of current market conditions that may affect how the Fed manages monetary policy regarding interest rates. Right now, expectations are for the Fed meeting at the end of this month at raising another 75 basis points, but could a big come-down in CPI numbers adjust this a bit?
Questions or comments about this article and/or its author? Click here>>
Friday, July 8, 2022
Nonfarm payrolls for June, issued this morning by the U.S. Bureau of Labor Statistics (BLS), came out ahead of expectations on the headline: 372K new jobs were filled last month, well beyond the 250-290K range analysts were expecting. The Unemployment Rate remained steady at 3.6% — the fourth-straight month at this historically low figure.
The private sector alone created 381K new jobs, led by Professional/Business Services at 74K, Leisure/Hospitality 67K. Healthcare 57K and Manufacturing — working its way back to pre-Covid levels — reached 29K last month. Score one for those economists who do not believe we are currently in a recession. What kind of recession brings in 380K new jobs per month over the past four months?
We did see downward revisions for the previous two months: May lightly dipped to 384K from 390K earlier reported, but April data came well off earlier tallies: 368K today versus 436K previously. Also, 500K+ jobs coming in per month during the Great Reopening, looks to be a thing in our rear view — at least until a new up-cycle buoys the economy, whenever that might be.
Average Hourly Earnings in June grew at the expected +0.3% rate, down a bit from the upwardly revised +0.4% in May. Year over year, we see a still-high +5.1%, though ebbing from the +5.3% we saw the previous month and +5.6% in March this year. Labor Force Participation, however, stayed disappointingly low at 62.2%. (Pre-Covid, we were registering 63.4% Labor Force Participation.)
Pre-market activity has been somewhat volatile since these numbers came out, with a downward bias. The Nasdaq is falling a bit harder than the Dow and S&P 500, but this may be in response to stronger gains in the tech-heavy index over the past few sessions. In any case, the indices have already come back a bit from the lows reached this morning on BLS numbers’ impact.
Before we get too analytical about whether a stronger-than-expected labor market with steadying wage growth should cause a market sell-off, let’s focus now on next week’s Consumer Price Index (CPI), which will be a more direct illustration of current market conditions that may affect how the Fed manages monetary policy regarding interest rates. Right now, expectations are for the Fed meeting at the end of this month at raising another 75 basis points, but could a big come-down in CPI numbers adjust this a bit?
Questions or comments about this article and/or its author? Click here>>
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