Advertisement
U.S. markets closed
  • S&P Futures

    5,210.00
    -4.75 (-0.09%)
     
  • Dow Futures

    39,209.00
    -14.00 (-0.04%)
     
  • Nasdaq Futures

    18,196.00
    -35.50 (-0.19%)
     
  • Russell 2000 Futures

    2,048.50
    -1.30 (-0.06%)
     
  • Crude Oil

    82.63
    -0.09 (-0.11%)
     
  • Gold

    2,165.00
    +0.70 (+0.03%)
     
  • Silver

    25.34
    +0.08 (+0.32%)
     
  • EUR/USD

    1.0878
    +0.0001 (+0.01%)
     
  • 10-Yr Bond

    4.3400
    +0.0360 (+0.84%)
     
  • Vix

    14.33
    -0.08 (-0.56%)
     
  • GBP/USD

    1.2726
    -0.0003 (-0.02%)
     
  • USD/JPY

    149.2980
    +0.2000 (+0.13%)
     
  • Bitcoin USD

    65,614.43
    -2,299.67 (-3.39%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,722.55
    -4.87 (-0.06%)
     
  • Nikkei 225

    39,596.29
    -144.15 (-0.36%)
     

June jobs report not a Fed game changer despite some weakness

Job growth cooled down a bit last month. The Labor Department reported the U.S. economy created 223,000 jobs in June, slightly below the 230,000 economists were expecting. Meantime, revisions for May and April showed 60,000 fewer jobs were created in those two months.

The overall unemployment rate edged lower to 5.3%, still holding on to that seven-year low and not too far from the 5.0%-5.2% range most Fed policymakers consider consistent with full employment.

Joe Brusuelas, chief economist at McGladrey, says some seasonal factors in the report likely understates the true pace of job growth in the economy.

"What you are seeing is just a bit of a payback for over the last several months... We've seen some really strong growth--even that decline in the unemployment rate. What happened was over the past two months, 500,000 people entered the workforce because wages actually are going up, we just saw a little break in June. You'll see that reaccelerate," he says. "I would fully expect that the United States labor force would be in full employment roughly around 5.2% by the end of the year."

The number of Americans participating in the labor force fell to 62.6% in June after hitting a four month high of 62.9% in May.

Average hourly earnings were flat in June at $24.95 after increasing 0.3% in May. That brings the year-over-year increase to 2.0%, which is well below the Federal Reserve's 3.5% target.

Brusuelas thinks despite some pockets of softness in the report the employment report is still supportive of a Fed rate hike in September and Yahoo Finance Senior Columnist Michael Santoli agrees.

"It doesn't really change the path at all. It's basically an on trend report, in terms of the total amount of jobs gains. I feel like the Fed is looking for that excuse to get going here, and September is a good time as any. I think something would really have to disturb the overall global picture or job growth would have to go off the rails for this to essentially change that story. We're at the sixth anniversary of the beginning of the recovery and the end of the last recession. It's probably time to get off zero and the Fed recognizes that," Santoli adds.

U.S. employment has increased for 57 straight months as of June.

Advertisement