Economic News
United States Economy Adds 209,000 Jobs in June 2023
The Labor Department has released its June 2023 jobs report, which also includes some amendments to previously results.
About the report:
According to the U.S. Bureau of Labor Statistics, the economy added 209,000 jobs in June. Although this continued a 30-month streak of added jobs, June’s figure was the lowest since December 2020. It’s also lower than the 240,000 jobs economists surveyed by the Wall Street Journal expected.
What’s more, figures for April and May were also adjusted downward, with May’s number going from the originally-reported 339,000 to 306,000 and April’s shifting from 294,000 to 217,000. Combined, this means that the two months saw 110,000 fewer jobs added than previously thought.
Meanwhile, the unemployment rate ticked down to 3.6% after rising to 3.7% in May.
As for wages, the latest report found that average hourly earnings increased by 12¢ to $33.58, marking a 0.4% increase from last month. Year over year, this average has increased 4.4%. This puts it in line with the 4% YOY rise the Consumer Price Index recorded in May — although wages hadn’t previously kept up with inflation when the CPI topped 8% last year.
What they’re saying:
While the decrease in new jobs may seem like a bad thing, University of Michigan economics professor Betsey Stevenson explained in a CNBC interview (via MarketWatch), “This is actually a great number. This is a number that is something we can sustain. We can’t sustain adding 300,000, 400,000, 500,000 jobs a month. We need to see it slow. It’s doing exactly what it needs. If we’re going to have a soft landing, this is what it looks like.” However, despite this outcome, Steveson believes another Federal Reserve interest rate increase is in the cards, stating, “I do think that the Fed train is rolling toward another rate hike, but I wouldn’t put my money on a second one yet.”
Elsewhere, FHN Financial chief economist Chris Low expressed similar sentiment, writing in a note to investors, “In a sense, this is the best possible jobs report, then, threading the needle between too strong and too weak. People should be happy to see decent job growth and decent wage growth. The Fed can take pleasure in slowing momentum and wage growth stabilizing rather than rising, while bond traders can breathe a sigh of relief there is no sign of the strength picked up by ADP yesterday.”
My thoughts:
For months, I’ve been looking at these monthly reports and noting the conflicting economic signals that were continuing. Finally, it looks as though the results the Federal Reserve and others were looking for are arriving. Then again, one month’s report does not a successful “soft landing” make. In other words, while things are looking good at the moment, we’ll need to wait and see whether the wild economy we’ve seen in the past few years has finally normalized.
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