June Jobs Report Commentary from MBA's Mike Fratantoni

July 5, 2024 Press Release
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The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in June.  


“Similar to May, the headline gain in nonfarm payroll employment data in June does not tell the entire story. While the headline gain showed an increase of 206,000 jobs, more than one-third of that was a gain in government employment, largely a function of increases in state and local jobs. Although June’s increase was above our expectations, both April and May figures were revised down by a combined 111,000 jobs, marking the three-month average down to a 177,000 increase.

“Beyond this headline, other aspects of the data indicate a slowing job market. The unemployment rate ticked up to 4.1%. Wage gains slowed again to 3.9% on a 12-month basis, and temporary hires actually decreased by 49,000, a sign that business demand for labor is decreasing.

“Historically-speaking, this is still a tight job market. However, relative to more recent data, the job market is weakening. Inflation data showing more reductions for the next couple of months will be the most important evidence that the Federal Reserve needs to cut rates in September. The current job market data points in that direction once you read below the headline.”