EXPLANATORY: 5 key takeaways from the June jobs report | business news

By PAUL WISEMAN, AP Economics Writer

WASHINGTON (AP) — Inflation is red hot. The stock market is falling and interest rates are rising. American consumers are depressed and angry. Economists are warning of potentially dark times ahead.

But employers? They just keep hiring.

The Labor Department reported Friday that America’s battered and battered economy managed to add a vigorous 372,000 jobs in June, well above the 275,000 economists had expected. And the unemployment rate stood at 3.6%, just one point above the 50-year low that was recorded just before the coronavirus pandemic crushed the economy in early 2020.

“The continued strength of the labor market is simply astounding, despite all the headwinds facing new hires,” said Christopher Rupkey, chief economist at research firm FWDBONDS LLC, dismissing concerns that the economy could be headed for a recession in the short term. “This is not what a recession looks like.”

Political Cartoons

The US labor market has staged a remarkable recovery from the depths of the COVID-19 recession in the spring of 2020: in March and April of that year, the United States lost a staggering 22 million jobs.

But big government spending injections, including expanded unemployment benefits and relief checks for most households and ultra-low interest rates set by the Federal Reserve, fueled a propulsive recovery. Employers added a record 6.7 million jobs last year. And they’ve been adding an average of 457,000 more per month so far in 2022.

The nation is now just 524,000 jobs short of the number it had in February 2020, just before COVID struck. Counting last month’s hiring, in fact, the private sector has regained all the jobs it lost to the pandemic recession. The remaining deficit resides entirely in government payrolls.

The strong recovery has a downside: It has fueled the highest inflation in 40 years. And the Fed is likely to see June’s hiring spree as another reason to continue aggressively raising its benchmark short-term interest rate as it did in March, May and June to try to rein in inflation. Higher rates will likely weaken the economy because they will make borrowing more and more expensive for consumers and businesses.

Here are five takeaways from the June jobs report:


“Recent numbers would generally be consistent with a breakneck economic boom,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. But hiring has lost some momentum. From April to June, employers added an average of 375,000 jobs per month, down from the average of 539,000 in the first three months of 2022 and a monthly average of 562,000 last year.

What’s more, in its jobs report on Friday, the government said hiring was weaker in the spring than it had originally estimated. Their revisions removed a combined 74,000 jobs from April and May payrolls.


The median hourly wage increased 0.3% from May to June and 5.1% over the past year. The year-over-year profit was the lowest since December. And it wasn’t enough to keep up with the 12-month jump in consumer prices, which hit a 40-year high of 8.6% in May.

Wells Fargo economists Sarah House and Michael Pugliesi said Fed policymakers would likely welcome “tepid earnings growth” because it could ease concerns that rising wages would drive prices ever higher, far above the central bank’s 2% target. At the same time, economists warned that the slowdown in wage gains is “another blow to households facing the highest inflation in more than a generation.”

And as households lose purchasing power due to higher prices, they can slash their spending, which typically accounts for around 70% of the economy’s output.


US factories added 29,000 jobs last month, restoring manufacturing payrolls to nearly 12.8 million, just above pre-pandemic levels.

Cooped up at home during the pandemic and with savings from relief checks and, in some cases, lower travel costs, consumers have been eagerly buying manufactured goods, from appliances to patio furniture to cars. The Institute for Supply Management, a trade group for purchasing managers, says its manufacturing index has posted growth for 25 straight months, though it fell in June.

But the factory boom may not last. Higher interest rates are driving up borrowing costs. More expensive loans, in turn, could slow demand for factory goods and increase the value of the US dollar, making US-made products more expensive in foreign markets.


As the threat of COVID-19 recedes, or appears to recede, consumers have shifted their spending away from manufactured goods and toward services they had to forego while sheltering at home. Restaurants, bars and hotels, devastated in the early days of the pandemic, are now in full hiring. Food and beverage establishments added nearly 41,000 jobs last month. Hotels added nearly 15,000. However, payrolls in both businesses remain well below pre-pandemic levels.

Leisure and hospitality businesses, including hotels, restaurants and bars, increased hourly wages 9.1% last month from a year earlier, keeping ahead of inflation, and 1% from May, three times the increase. average monthly wage in the private sector.

The unemployment rate for African Americans fell to 5.8% last month from 6.2% in May. At 21.2 million, the number of black Americans in the workforce, which includes those working or looking for work, exceeds pre-pandemic levels, though the number has fallen since May.

The number of whites in the labor force is 1.4 million less than in February 2020. White unemployment increased to 3.3% from 3.2% in May. Hispanic unemployment was unchanged at 4.3%.

In June, the percentage of black Americans who had a job or were looking for one, the so-called labor force participation rate, was 62.2%, down from 63% in May, but higher than the participation rate for whites ( 61.9% in June). ) for the third consecutive month.

Copyright 2022 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Leave a Comment