News & Stories

June Jobs Report: Job Gains Defy Expectations as Unemployment Rises, Wages Cool

The Bureau of Labor Statistics on Friday revealed the United States economy added 206,000 jobs in June, a slight cooldown in hiring compared to May’s report, which was revised downward to show 218,000 jobs being added overall.

The primary industries that saw job gains in June were:

Over the first six months of 2024, the economy added an average of 222,000 jobs per month. This number is slightly down from the average of 251,000 jobs per month in 2023, but it’s still a strong monthly addition of jobs.

Other economic data reported over the last month included:

  • Unemployment ticked up to 4.1%, the highest it’s been since November 2021.
  • Wages increased 0.3% from May to June and 3.9% year-over-year. It’s the first time since June 2021 year-over-year wage increases were below 4%.
  • The number of long-term unemployed (those out of a job 12 months or longer) increased to 1.5 million in June, a 36% rise year-over-year.
  • Private employers added 150,000 jobs in June, according to ADP, and almost half of those gains came from the leisure and hospitality sector ahead of the busy summer months.
  • “Job growth has been solid, but not broad-based,” the chief economist at ADP said. “Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.”
  • Both primary inflation measures—the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) index—ticked down this month. In May, CPI was at 3.3%, and PCE was listed at 2.6%, indicating a slight cool down in prices raising in the month, something the Fed wants to see more of before revisiting interest rate drops in 2024.

A week before the release of the June jobs report, Federal Reserve Governor Michelle Bowman expressed hesitations in interest rates dropping in the immediate future.

“Should the incoming data indicate that inflation is moving sustainably toward our 2 percent goal, it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive,” the governor said.

“However, we are still not yet at the point where it is appropriate to lower the policy rate, and I continue to see a number of upside risks to inflation.”

Governor Bowman cited a continually hot core Consumer Price Index reading (3.4% in May) as a reason to believe inflation will not hit the Federal Reserve’s 2% goal soon. However, rising unemployment and cooling wages could influence rate cuts this year.