July 10, 2023

The US economy added +209,000 jobs in June, below expectations.

Previous months were also revised downwards by -77k in April and -33k in May, for a total of -110k.

As a result, average job gains over first half of this year were +278k per month, down from an average rate of +399k per month in 2022.

Jobs gains in May were led by government employment (+60k), followed by health care (+41k), social assistance (+24k), construction (+23k), and professional and business services (+21k). Leisure and hospitality added +21k jobs, but remains -369k (-2.2%) below its pre-pandemic levels.

Retail trade lost -11k jobs in June, and transportation and warehousing lost -7k. Other sectors, including manufacturing, saw little change.

The US unemployment rate declined slightly in June to 3.6%.

The labor participation rate in June remained unchanged at 62.6%, though this remains below pre-Covid levels.

Much of the post-Covid decline in labor participation has come from a persistent fall-off among those age 55 and older.

In contrast, the employment-to-population ratio among those of prime working age (25-54) has risen to 80.9%, higher than both its pre-Covid and pre-2008 peaks.

Average hourly wages rose +0.4% m/m in June, up +4.4% from a year ago. With the rate of consumer inflation (CPI) at +4.1% y/y in May, it appears that real wages are finally up again year-on-year.

In 1Q2023, real hourly wages were down -2.6% from a year ago.