June Jobs Report Shows 209,000 New Hires, Weakest in 3 years, With Rising Wages
Job gains slowed notably in June, with downward revisions for May and April, suggesting a slower pace of hiring into the summer months.
Updated at 8:52 am EDT
The U.S. economy added fewer-than-expected new jobs last month, data indicated Friday, adding a further layer of complexity into the market's attempt to assess the strength of the labor market
The Labor Department's Bureau of Labor Statistics said 209,000 new jobs were created last month, well shy of the Wall Street consensus forecast of a 228,000 gain, and the weakest monthly gain in three years.
Private payrolls were pegged at 149,000, the BLS said, as the unemployment rate eased to 3.6%, just ahead of the 1969 low of 3.4% recorded earlier this year.
The BLS also revised its May jobs-addition estimate lower, to 306,000 from its original estimate of a 339,000 net gain, while cutting its April estimate to 217,000 from its prior estimate of 294,000.
The BLS noted that hourly wages were up 0.4% on the month - compared to the 0.3% gain recorded in May and the 0.5% pace of March and April. Wall Street's consensus forecast was for a 0.3% gain. On a year-on-year basis, wages were up 4.4%, compared with the 4.3% pace recorded in May, the BLS said, and the Wall Street forecast of 4.2%.
“Employment in the US has been stronger than many had expected which has resulted in consumers being better able to withstand the pressures of high inflation and the Fed’s aggressive hiking cycle," said Richard Carter, head of fixed interest research at Quilter Cheviot. "Next week’s inflation figures will paint a clearer picture of the Fed’s next steps, but today’s figures suggest that not only will it hike rates later this month, but it may have to go even further than it would have hoped in the coming months if the labour market does not begin to show signs of weakening.”
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U.S. stocks extended declines following the data release, with the Dow Jones Industrial Average indicating an 80 point decline and the S&P 500 priced for a 10 point dip. The tech-focused Nasdaq was marked 11 points lower.
Benchmark 10-year Treasury note yields rose 2 basis points from overnight levels to 4.058% while 2-year notes edged higher to 4.978%. The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.35% lower at 102.802.
The CME Group's FedWatch now indicates a 92.4% chance of a 25 basis point hike later this month, up from 81.6% at the close of trading on June 30, with bets on another rate hike in November hovering at around 40%.
Earlier this week, payroll processing group ADP said in its National Employment Report that private sector jobs grew by 497,000 last month, well ahead of Street forecasts of a 228,000 gain, using the new methodology developed last summer.
Wages gains for those staying at the same job slowed to 6.4%, ADP said, while gains for job-changers fell to 11.2%, the slowest since October of 2021.
In a separate report Thursday, the Labor Department said weekly jobless claims rose modestly to 248,000, just ahead of analysts' estimates of a 245,000 tally.
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