Unemployment climbed to a 32-month high in June, even as job growth remained robust, according to the latest data from the Bureau of Labor Statistics (BLS).
- Total nonfarm payroll employment rose by 206,000 last month, surpassing economists’ expectations of 190,000. However, this figure marks a slight decrease from the revised increase of 218,000 in May and is the second lowest level in the past seven months.
32-Month High: Despite the better-than-expected job creation, the unemployment rate rose unexpectedly to 4.1% in June, up from 4.0% in May. This is the highest unemployment rate since November 2021.
Government Growth: The increase echoes trends observed in the recent Job Openings and Labor Turnover Survey (JOLTS) report. The government sector led job creation with 70,000 new positions in June. Healthcare followed with an addition of 49,000 jobs, while social assistance and construction sectors added 34,000 and 27,000 jobs, respectively.
- In contrast, the professional and business services sector shed 17,000 jobs, and retail employment decreased by 9,000.
Wages: Average hourly earnings for all employees on private nonfarm payrolls rose by 0.3% in June, aligning with economist projections but down from a 0.4% increase in May. Annual wage growth slowed to 3.9% in June, the lowest rate since June 2021, down from 4.1% in May.
Downward Revision: Revisions to previous months’ data also painted a slightly less optimistic picture. April’s total nonfarm payroll employment was revised down by 57,000, and May’s figure was revised down by 54,000.
Good News: Despite the economy creating more jobs than expected the rising unemployment rate and slowdown in wage growth were well received by markets. The 10-year Treasury yield fell by 8 basis points, indicating investor confidence in the economic outlook.
