Crestone Mortgage Economic Commentary – June Jobs Report
The Bureau of Labor Statistics (BLS) reported that 147,000 jobs were created in June, coming in above expectations of 110,000. Adding to the upside, revisions to the prior two months showed a net gain of 16,000 jobs—a notable shift after a long string of negative revisions.
However, this report stands in stark contrast to ADP’s data released the day before, which showed a loss of 33,000 private sector jobs.
Public vs. Private Sector Breakdown
While the headline number looks solid, private sector job growth was just 74,000, the weakest in several months. The remaining 73,000 jobs came from the government sector, with 63,000 of those tied to state and local education.
That education number raised a few eyebrows. June typically sees seasonal slowdowns in school-related employment as summer begins. In raw terms, there were actually 542,000 fewer education jobs, but a seasonal adjustment added 605,000 jobs, bringing the reported number into positive territory. That adjustment is significant—and potentially misleading in gauging true labor market strength.
Wage and Earnings Trends
One bright spot in the report was cooling wage inflation.
• Average Hourly Earnings rose 0.2%, a notch below expectations.
• Year-over-year wage growth slowed to 3.7%, down from 3.9%.
In addition, the average workweek declined to 34.2 hours, down by 0.1 hour. When converted into full-time job equivalents, that reduction is the rough equivalent of nearly 500,000 lost jobs.
Combining wages and hours worked, average weekly earnings actually fell 0.1% in June, and year-over-year earnings growth slowed from 3.9% to 3.4%—another sign of easing income pressures.
Household vs. Business Surveys
The BLS jobs report includes two surveys:
• The Business Survey feeds the headline job creation number.
• The Household Survey informs the unemployment rate.
The Household Survey showed 93,000 new jobs, weaker than the headline figure. However, since 130,000 people exited the labor force, the unemployment rate declined to 4.1%. That drop isn’t necessarily a positive—it reflects fewer people being counted, not more people being hired.
Unemployment Claims
The latest Initial Jobless Claims came in at 233,000, slightly down from 237,000, but still part of a six-week stretch of elevated claims. Meanwhile, Continuing Claims held steady at 1.964 million, marking the sixth straight week above 1.9 million and creeping closer to the 2 million mark.
This trend suggests that while the pace of job creation remains positive, those who lose jobs are having a harder time finding new ones—a sign that hiring is slowing, even if layoffs haven’t surged.