Quick Facts:
- The unemployment rate ticked higher to 4.1% against expectations it would hold steady at 4.0%.
- Job gains occurred in government, health care, social assistance, and construction.
- The number of long-term unemployed (those jobless for 27 weeks or more) rose by 166,000 to 1.5 million in June. This measure is up from 1.1 million a year earlier. The long-term unemployed accounted for 22.2 percent of all unemployed people in June.
- The number of people employed part time for economic reasons, at 4.2 million, changed little in June. These individuals, who would have preferred full-time employment, were working part time because their hours were reduced and were unable to find full-time jobs.
Looking Forward:
- 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%.
- 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).
- “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.
- 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.
- 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.
Source: U.S. Bureau of Labor Statistics – The Employment Situation – June 2024
