The Jobs Report – June 2022

Highlight

In June the economy added 372K jobs, besting the estimate of 265K but a decrease from last month’s gain of 390K.

What you need to know:

1. The three-month average job growth was 375K, a decline from last month’s 383K and down noticeably from April’s 493K. Although the economy is adding jobs at a solid pace, it is decelerating from earlier this year.
2. Average hourly earnings rose 5.1% from last year. As in prior months, wage gains look impressive but failed to keep up with consumer price increases leaving workers with less real income. This continues to be a concern for consumer spending.
3. The household survey showed the unemployment rate held steady at 3.6%, only 0.1% higher than pre-pandemic levels.  The survey did show that the economy lost 315K jobs in June offset by the labor force shrinking by 353K people. This bears watching as a potential warning sign of changes in the labor market.
4. Private payrolls rose by 381K, an acceleration from last month’s gain of 331K. Government lost 9K jobs.
5. Job gains were spread across the economy with all sectors showing gains for the month. In a change from recent reports, Leisure and Hospitality was not the best sector with 67K jobs added, the best was Education and Health Services at 96K.
6. Overall, we feel this is another solid jobs report. As we noted above, there is some slowing of growth in the labor market that the Fed will welcome as they worry about an overheating economy. We believe this report will not dissuade the Fed from increasing rates while consumer prices are well above the Fed’s target rate.