🔴Disappointing June payrolls: +57K, lowest in 4 months, "fake" unemployment rate

June NFP only +57K jobs, far below the forecast of +115K - the weakest increase in 4 months, after 3 straight months of beating expectations.
The data for the previous two months were also heavily revised:
- April: +179K → +148K (-31K)
- May: +172K → +129K (-43K)
-> -74K jobs were removed from previously published figures.
🔴By industry breakdown:
- Professional & business services: +36K - still the main driver
- Social assistance: +25K
- Healthcare: +22K
- Leisure & hospitality: -61K - the main reason pulling NFP down
Weaker-than-usual seasonal hiring. Goldman Sachs previously forecast that the World Cup would contribute +40K to this sector, but the data shows the opposite. The impact of the World Cup is likely to be clearer in next month’s report.
🔴Unemployment rate dips to 4.2% (from 4.3%), but the reason is that the labor force participation rate fell to 61.5% - the lowest since March 2021.
-> Unemployment "dips" because workers leave the labor force entirely (accepting long-term unemployment), not because they find jobs.
🔴The household survey is even worse:
- Employed persons: -507K
- Full-time jobs: -514K (vs -79K last month)
- Part-time jobs: -53K (vs +266K last month)
-> Full-time jobs have fallen by over 2.2M from the January 2025 peak
U.S. labor market data has been choppy over the past 3 years—there were periods that raised concerns, yet it rebounded in an almost unbelievable way. However, this time the data matters more because Warsh’s management approach is completely different from the 8 years under Powell. It’s not certain the Fed will take a softer stance, even though the labor data is quite bad.