A small miss versus consensus -- and a big miss versus our model -- and all that with the bar lowered by large downward revisions to the prior months. But 209,000 payrolls is a solid number that passes the smell-test for credibility, and it is confirmed by the household survey at 273,000.
What you're not hearing about the indestructible US jobs market
Friday, July 7, 2023
A solid but unspectacular June jobs report shows the expansion lives, and gives the FOMC room to skip again.
Update to Strategic View
209,000 net payrolls for June was a solid number confirmed by the household survey, but a miss versus the consensus and versus our model, especially with the bar lowered by large downward revisions to the prior two months. Yesterday’s ADP and ISM Services numbers caused expectations for future Fed rate hikes to rise, so compared to that June’s somewhat disappointing results are a Goldilocks scenario. Powell continues to insist the labor market is tight. But it can’t be when more than twice as many persons who aged into the eligible labor pool got jobs in June. The JOLTS survey shows job openings off 2.2 million since last March’s peak. But net payrolls have grown by 4.5 million, implying that more than two jobs were created for every opening – so how can the labor market be tight? Next week’s CPI should print a little above 3%. With that and today’s solid but unspectacular jobs performance, the July FOMC is live for another “skip,” which will likely turn out to be an end.