watch
now
The
U.S.
economy
again
added
slightly
more
jobs
than
expected
in
June
though
the
unemployment
rate
increased,
the
Labor
Department
reported
Friday.
Nonfarm
payrolls
increased
by
206,000
for
the
month,
better
than
the
200,000
Dow
Jones
forecast
though
less
than
the
downwardly
revised
gain
of
218,000
in
May,
which
was
cut
sharply
from
the
initial
estimate
of
272,000.
The
unemployment
rate
unexpectedly
climbed
to
4.1%,
tied
for
the
highest
level
since
October
2021
and
providing
a
conflicting
sign
for
Federal
Reserve
officials
weighing
their
next
move
on
monetary
policy.
The
forecast
had
been
for
the
jobless
rate
to
hold
steady
at
4%.
“It’s
a
soft
landing
kind
of
report,”
Jan
Hatzius,
chief
economist
at
Goldman
Sachs,
said
on
CNBC’s
“Squawk
on
the
Street.”
“This
does
support
the
idea
that
[the
Fed]
will
cut
relatively
soon,
and
we
continue
to
think
September
is
the
most
likely.”
The
increase
in
the
unemployment
rate
came
as
the
labor
force
participation
rate,
which
indicates
the
level
of
working-age
people
who
are
employed
or
actively
searching
for
a
job,
rose
to
62.6%,
up
0.1
percentage
point.
The
so-called
prime
age
rate,
which
focuses
on
those
between
ages
25
and
54,
rose
to
83.7%,
its
highest
in
more
than
22
years.
A
broader
unemployment
rate
which
counts
discouraged
workers
and
those
holding
part-time
jobs
for
economic
reasons
held
steady
at
7.4%.
Household
employment,
which
is
used
to
calculate
the
unemployment
rate,
rose
by
116,000.
The
household
survey
also
showed
a
decrease
of
28,000,
in
full-time
workers
and
an
increase
of
50,000
in
part-time
workers.
Though
June
job
creation
topped
expectations,
it
was
due
in
large
part
to
a
70,000
surge
in
government
jobs.
Also,
health
care,
a
consistent
leader
by
sector,
added
49,000
while
social
assistance
contributed
34,000
and
construction
was
up
27,000.
Several
sectors
saw
declines,
including
professional
and
business
services
(-17.000)
and
retail
(-9,000).
On
wages,
average
hourly
earnings
increased
0.3%
for
the
month
and
3.9%
from
a
year
ago,
both
in
line
with
estimates.
The
average
work
week
was
steady
at
34.3
hours.
Stock
market
futures
nudged
higher
following
the
report
while
Treasury
yields
were
negative.
Traders
also
increased
their
bets
that
the
Fed
would
implement
its
initial
interest
rate
cut
in
September.
“The
job
market
is
bending
without
yet
breaking,
which
boosts
the
argument
for
rate
cuts,”
said
David
Russell,
global
head
of
market
strategy
at
TradeStation.
“Things
are
not
too
hot
and
not
too
cold.
Goldilocks
is
here
and
September
is
in
play”
for
a
Fed
rate
cut.
In
addition
to
the
substantial
revision
in
the
May
payrolls
count,
the
Bureau
of
Labor
Statistics
lowered
April
to
just
108,000,
a
slide
of
57,000
from
the
previous
estimate.
Combined,
the
revisions
cut
111,000
from
the
April
and
May
totals.
Long-term
unemployment
rose
sharply
on
the
month,
up
166,000
to
1.5
million,
compared
with
1.1
million
a
year
ago.
The
BLS
said
the
share
of
long-term
unemployed
as
a
percentage
of
the
total
jobless
level
was
22.2%,
compared
with
18.8%
a
year
ago.
The
unemployment
rate
for
Black
workers
moved
up
to
6.3%,
its
highest
since
March.
The
rate
for
Asians
jumped
a
full
percentage
point
to
4.1%,
its
highest
since
August
2021.
The
report
comes
with
Federal
Reserve
officials
contemplating
their
next
moves
on
monetary
policy.
At
their
most
recent
meeting,
policymakers
indicated
they
need
to
see
more
progress
on
inflation
before
lowering
interest
rates,
while
noting
that
a
strong
economy
and
in
particular
a
solid
labor
market
lessen
the
urgency
to
act
anytime
soon,
according
to
minutes
released
earlier
this
week.
Despite
indications
to
the
contrary,
markets
are
pricing
in
two
rate
cuts,
assuming
quarter
percentage
point
reductions,
before
the
end
of
2024.
Fed
officials
at
the
June
meeting
penciled
in
just
one
cut,
saying
they
need
to
see
“additional
favorable
data”
before
moving
forward
with
reductions.
“There
are
no
cracks
here
that
would
cause
the
Fed
to
rush
to
the
rescue
with
rate
cuts,
and
the
labor
market
is
in
line
with
a
continuation
of
slowing
inflation,”
said
Robert
Frick,
corporate
economist
at
Navy
Federal
Credit
Union.
“That
should
lead
to
one
or
two
cuts
this
year.”
The
Fed
targets
its
key
lending
rate
in
a
range
between
5.25%-5.50%,
the
highest
in
23
years
and
a
level
at
which
it
has
sat
for
about
a
year.
There
have
been
recent
signs
of
cracks
in
the
labor
market,
with
purchasing
manager
surveys
showing
contraction
in
hiring
for
both
the
manufacturing
and
services
sector.
Moreover,
broader
economic
growth
is
slowing.
Gross
domestic
product
increased
just
1.4%
annualized
in
the
first
quarter
and
is
on
track
to
grow
at
just
a
1.5%
pace
in
the
second
quarter,
according
to
the
Atlanta
Fed.
