Payrolls Rise 213K, Stronger Than Expected But Hourly Earnings Disappoint Again, Unemployment Rate Rises

Ahead of today's payrolls report, there was some confusion: will Trump tweet about it (like he did last month), or won't he, and if not, is it because the number will be a disappointment?

Well, moments ago the BLS gave us the answer, and contrary to whispers of a miss to the 195K consensus expectation, in June the US labor market continued to chug along, with some 213K jobs created, stronger than expected, while May's +223K payrolls were also revised higher to +244K. According to the household survey, the number of people employed also rose from 155,474K to 155,576K, an increase of 102K workers, while the number of unemployed Americans jumped by 499K from 6.065MM to 6.564MM.

Going further back, The April payrolls change was revised up from +159Kto +175K. With these revisions, employment gains in April and May combined were 37,000 more than previously reported. After revisions, job gains have averaged 211,000 per month over the last 3 months.

Yet while the payrolls report was solid, there was some disappointment in the Average Hourly Earnings print, which missed expectations of a 2.8% Y/Y increases, rising by 72 cents or 2.7%, unchanged from last month, with the monthly increase of 0.2% also missing the expected number of 0.3%. Average hourly earnings of private-sector production and  non-supervisory employees increased by 4 cents to $22.62 in June.

The average earnings number was a little bit better on a weekly basis, which saw a 3.0% increase, while weekly hours for all employees were as expected, and unchanged from last month's 34.5. In manufacturing, the workweek edged up by 0.1 hour to 40.9 hours, and overtime edged up by 0.1 hour to 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours.

Meanwhile, the broader unemployment rate also surprised, rising from 3.8% to 4.0%, missing consensus of an unchanged print (which may explain the lack of a Trump tweet)...

... with the rise in the unemployment rate largely a function of the increase in number of unemployed people, which increased from 6.065MM to 6.564MM, and the rise in the labor force participation rate, which edged higher from 62.7% to 62.9%

Some more details from the report:

Total nonfarm payroll employment increased by 213,000 in June and has grown by 2.4 million over the last 12 months. Over the month, job gains occurred in professional and business services, manufacturing, and health care, while employment in retail trade declined.

Employment in professional and business services increased by 50,000 in June and has risen by 521,000 over the year.

Manufacturing added 36,000 jobs in June. Durable goods manufacturing accounted for nearly all of the increase, including job gains in fabricated metal products (+7,000), computer and electronic products (+5,000), and primary metals (+3,000). Motor vehicles and parts also added jobs over the month (+12,000), after declining by 8,000 in May. Over the past year, manufacturing has added 285,000 jobs.

Employment in health care rose by 25,000 in June and has increased by 309,000 over the year. Hospitals added 11,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+14,000).

Construction employment continued to trend up in June (+13,000) and has increased by 282,000 over the year.

Mining employment continued on an upward trend in June (+5,000). The industry has added 95,000 jobs since a recent low point in October 2016, almost entirely in support activities for mining.

In June, retail trade lost 22,000 jobs, largely offsetting a gain in May (+25,000).

Employment showed little or no change over the month in other major industries, including wholesale trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government.

Overall, a failry solid payrolls number, yet the miss in earnings may give the market room for pause and pressure the dollar, as the Fed may reevaluate if the economy - or at least wages - is indeed strong enough to sustain 2 more rate hikes in 2018.

Comments

lester1 Fri, 07/06/2018 - 08:38 Permalink

Earnings will NEVER go up due to globalization and illegal immigration.

Plus, you have stubborn corporations who dont want to raise the pay and train workers. They just whine and cry how they cant find people. Which is a total lie the liberal media let's them get away with telling!

​​​​​​

21st.century lester1 Fri, 07/06/2018 - 09:19 Permalink

earnings will never go up if the moronic, UN-fair tax code from last century is not dumped ... replaced with broad based consumption taxes. Not VAT -- the sure way to kill your country-- like the Euro-pee- inz have done.

how does taxing the meager wages of citizens improve their earnings ?

they don't-- so, want to finally help citizens ? then stop taxing their wages.

In reply to by lester1

mad mad world Fri, 07/06/2018 - 08:49 Permalink

Some people will never be happy. Sad. The hourly earning can triple and someone will find some thing disappointing too.

Wtf with the down votes? Isn't it true someone will always find something negative in something?

21st.century Fri, 07/06/2018 - 08:59 Permalink

quoting U-3 #'s is for media retards and political party clowns.

 

U-6 is the only # that is even close to describing UN-employment 

 

7.3%  May

8.1% June

a pretty significant rise-- but, not necessarily a bad rise- since June almost always shows a rise in U-6 due to the belching out of fresh grads from government, factory colleges .

 

"non-farm payroll" -- fucking stop quoting that ridiculous, last century U-3 #.

 

rejected Fri, 07/06/2018 - 09:03 Permalink

BS like this shows they're getting more and more desperate with each passing day.

Memes spread that we're almost at full employment are becoming shrill. Everyone knows with a 100 million folks out of the work force there is no way this can be true.

Same for the "can't find qualified worker" meme. That's code for, can't pass drug tests and / or won't work for the wages offered. If you don't think American employers will screw Americans in hard times,,, I suggest watching the 'Grapes of Wrath' movie.

The crash must be really close at hand.

21st.century rejected Fri, 07/06/2018 - 09:37 Permalink

 

BS like this shows they're getting more and more desperate with each passing day.

Memes spread that we're almost at full employment are becoming shrill. Everyone knows with a 100 million folks out of the work force there is no way this can be true. OTWF - not accurate. my 87yr old mom is OTWF and part of the 100 mil. and also not looking for a job either, so, quoting participation rates are deceptive-- was never a valid attack against obama either. a fact #, sure, just not accurate. we have to be realistic about OotWF #, right?

Same for the "can't find qualified worker" meme. That's code for, can't pass drug tests and / or won't work for the wages offered. If you don't think American employers will screw Americans in hard times,,, I suggest watching the 'Grapes of Wrath' movie. ​​​​​​​True, but druggie is also a dis-qualifying reason. "Joad" couldn't read or write- and the story of the 1930's entrenched UN-employment was also a story of surplus, un-skilled citizens. I suggest reading books about the 1930's rather than watching Holly-wooden tales to be more informed. 

The crash must be really close at hand. ​​​​​​​Maybe?

In reply to by rejected

Cloverfield-Z Fri, 07/06/2018 - 09:16 Permalink

The labor force participation rate is the key metric to look at it.  And that rate has been in sharp decline since the Wall Street bailouts.  As free fiat money flooded into the coffers of the banksters the labour force participation rate accelerated downward at almost the same rate. The international banking cartel, through the Bank of International Settlements, is systematically gouging the US economy and it's happening in plain sight.  Yet everyone wants to blame immigrants / China / Muslims. Convenient scapegoats for the real terrorists.