US Employers Added Fewer Jobs in June Than Projected

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Bloomberg Jul 7, 2023 10:13 · 10.4k Views

Nonfarm payrolls increased 209,000 after a downwardly revised 306,000 advance in May, a Bureau of Labor Statistics report showed. The unemployment rate fell to 3.6%. Mike McKee reports on "Bloomberg Surveillance."

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Transcript

  • 00:00 209,000
  • 00:01 it is a lot lower than anticipated and a lot lower than it has been
  • 00:06 339 last month.
  • 00:08 I'm looking for
  • 00:09 the
  • 00:10 revision to that.
  • 00:10 We'll get that in a just a second.
  • 00:12 But of course the forecast was for 2:30 and we had that blow out ADP number yesterday.
  • 00:16 So this is quite a surprise.
  • 00:18 Private payrolls 149,000 that would compare with that 497,000 that ADP
  • 00:25 found because they measure private payrolls manufacturing up 7.
  • 00:29 That's a change from
  • 00:30 negative number the month before and the unemployment rate does fall back to 3.6%, which is what had been forecast.
  • 00:38 It is a little unusual to see unemployment dropping when
  • 00:41 we are awaiting
  • 00:43 for the Fed to keep raising interest rates to to push it up.
  • 00:46 Average hourly earnings come in stronger than expected, a 4/10 gain for the month of June
  • 00:52 and on a year over year basis that puts it at 4.4%, which is not the direction the Fed was hoping for.
  • 00:59 That's up from 4.3%
  • 01:01 in the prior month.
  • 01:03 Here's the revisions last month which was 339,
  • 01:06 now revised down to three O 6, so
  • 01:11 a little bit weaker for the last two months then.
  • 01:13 And
  • 01:14 the change in manufacturing payrolls which was -2 is now
  • 01:17 -3.
  • 01:19 However,
  • 01:20 the average hourly earnings revised up for May to 4/10
  • 01:25 and that put May at 4.4.
  • 01:27 So basically we're unchanged between
  • 01:30 June and May
  • 01:31 -110,000 total revised jobs for April and May going into June.
  • 01:38 So what we're looking at is a little bit weaker than,
  • 01:41 well a lot, a lot weaker, a
  • 01:43 lot weaker than anticipated
  • 01:45 and it's the first month in the last 15 that's come in
  • 01:49 below
  • 01:50 the economist expected all the way back to the March report of of last year, which we got in April of last year.
  • 01:55 Now the
  • 01:56 April numbers were revised down from 294,000 to 217,000, down 77,000 and then May down 33,000.
  • 02:05 We mentioned that.
  • 02:06 So you see from April, May and June weaker that
  • 02:10 a weaker labor market than people thought.
  • 02:13 So this is probably going to have an effect on the Fed
  • 02:17 even if the average hourly earnings are
  • 02:20 not
  • 02:21 specifically changed,
  • 02:22 not much change in terms of the unemployment rate.
  • 02:25 While it did go down,
  • 02:27 we saw
  • 02:28 273,000 new jobs in the household survey
  • 02:31 and unemployment fell by 140,000.
  • 02:34 So we've sort of reversed what happened
  • 02:36 last month when we went up to 37.
  • 02:38 So this is all going to
  • 02:40 raise the questions of soft landings and things like that.
  • 02:44 If we continue
  • 02:45 in this area might mention that construction spending,
  • 02:48 our construction hiring up 23,000,
  • 02:51 so the
  • 02:53 the home builders are really keeping the economy going.
  • 02:56 The other big employer was government.
  • 02:57 Government was up 60,000 on the month and little change,
  • 03:02 a gain of 21,000 for leisure and hospitality.
  • 03:05 The BLS puts it as little change
  • 03:07 but that compares with 232,000 in that ADP report.
  • 03:10 So ADP way off this month and
  • 03:14 I don't think anybody's surprised
  • 03:16 to hear that,
  • 03:17 but
  • 03:18 the
  • 03:19 labor market has clearly slowed.