One day at a time with June Jobs Report

Thursday’s release of the Jobs Report for June by the US Labor Dept, provided a surprise showing of only 57,000 non-farm jobs giving some observers, including economists, as well as lawmakers, concerns, since 110,000 were predicted; and, with the revisions to April and May, there was increased concern about the overall economy.

While one report is not a predictor, the added complexity has created equal concern for the markets and later actions of the Federal Reserve Bank at its meeting later this month.

Reactions have been mixed: “Overall, this report shows a job market that is a bit shakier than the May data had indicated, but inflation still remains too high,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association, reported The Hill.

Inflation is the boogeyman and at 4.2 percent, it has become a significant factor in how middle and lower income American families feel about the economy, and as we’ve reported the last few months, it is still a K shaped economy, with those at the lowest bar struggling to afford rent and groceries although there is slightly less concern with the lowered gas prices - about 50 cents less - than before the Israeli-American led war against Iran, but with the fragile understanding, and disagreement about progress by Iran, that outlook could change.

Supporting the more positive view of the economy, “The University of Michigan Consumer Sentiment index was revised higher to 49.5 in June 2026, up from a preliminary reading of 48.9, although it remained slightly below forecasts of 50,” but Surveys of Consumers Director Joanne Hsu reported that, “. . .  sentiment remains in unfavorable territory at 13% below the February 2026 reading prior to the start of the Iran conflict, and nearly 20% less than a year ago. The cost of living remains at the forefront of consumers’ minds; for the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances.”

Wages are now at a 0.3 percent increase of 13 cents totaling $37.64 but it’s not enough to keep up with the rate of inflation, “Over the year, average hourly earnings have increased by 3.5 percent. In June,average hourly earnings of private-sector production and nonsupervisory employees rose by 7 cents, or 0.2 percent, to $32.38,” BLS noted.

Of equal concern is the labor participation rate that sank to 0.3 percent, 61.5 percent, a figure closely watched by the Feds, and of concern for economists as it takes course among the financial markets as a bellwether of its confidence.

"June job gains slowed but did not collapse and unemployment edged lower for the wrong reason. That doesn’t do much to reassure new grads but job gains are still well above last year -- the threshold is low and wages have gotten sticky. Those gains are reinforcing the floor under service inflation, which will further agitate hawks at the Fed. Financial market hopes that the Fed will not hike in response to the report are misplaced -- we still expect two hikes by year end. July was not an active meeting for a rate hike in our forecast,” said Diane Swonk, chief economist at KPMG U.S to Investing.com.

Adding to the plurality of opinions is Mohamed El-Erian, former CEO of PIMCO who added that,"Combining (the nonfarm payrolls and unemployment rate) with other data in the report -- including a dip in labor force participation to 61.5% and 3.5% earnings growth -- suggests that the supply-side of the labor force was the primary driver for the miss in job creation. As to implications for Fed policy, this should dampen market expectations for a rate hike this year -- a scenario I have argued was a misreading of the Fed’s likely stance."

“It can be simultaneously true that employers are adding jobs amid a fairly stable labor market and you are having trouble finding work,” explained Elizabeth Renter, senior economist at NerdWallet.

“Paired with the very real affordability constraints brought on by inflation and right now could be a painful time for the 7 million people who are out of work.”

While statistics might be seen as less of a concern outside the statistical stratosphere of the BLS, the 4.2 unemployment rate belies many other worries, but there is hope among others, and “Gregory Daco, the chief economist at EY, a consulting firm, said he anticipates job growth will stabilize at approximately 70,000 per month for the rest of the year, and the unemployment rate may edge up, but only slightly,” according to The New York Times.

Add to the picture, one of caution, with most people staying in their jobs, rather than seeking out a new one for fear of failing to find another.

The White House must be watching all of this with cautious optimism considering the low polls of President Trump’s handling of the economy, a June 2026 NPR/PBS News/Marist Poll, said only 33% of Americans approved of how Trump is handling the economy, his lowest-ever economic approval rating on the issue since Marist began asking the question in 2019; yet ,“Kush Desai, a White House spokesman, said the jobs report “reinforces that the American labor market remains solid thanks to President Trump’s economic agenda. In his post on social media, he called particular attention to the slight uptick in manufacturing jobs last month.”

A look at the prime age employment (ages 25 to 54) ratio of 80.2 for June is especially troublesome, and along with their LFP loss of 83.3 that falling rate combined with the overall rate of 0.6 percentage points, seems as if might be an outlier, “the biggest one-month drop since 2009, outside the pandemic plunge. The number comes from the survey of households, which is more volatile than the business survey, and it’s possible (even likely) that the figure was a fluke and will reverse next month. But it’s a very odd reading, especially after a period of remarkable stability in the measure,” opined The Times.

“The leading reasons why prime-age adults (ages 25–54) are not in the labor force are care-giving responsibilities and personal health issues or disabilities. According to data from the U.S. Census Bureau's Current Population Survey (CPS) and independent polling, these two factors account for nearly 72% of the reasons why prime-age adults opt out of looking for work,”

Child care, especially compared with other countries, where subsidies are often the norm, combined with the high cost of American healthcare are credible reasons and with recent changes to coverage for many people, a choice between trying to work but finding less opportunities and with most employed people staying put, it’s easy to see, that for some, especially with a wage earning spouse, or partner, might result in this change of 720,000 people leaving the workforce.

While leisure and hospitality took a hit, not getting the expected World Cup bump, professional and business services gained, and in areas where AI was expected to decimate, it did not occur. That increase of 36,000 might not be a predictor, but it shows that the AI degeneration that many have feared is not here yet.

Health care increased at 22,000, although at a slower pace than seen before the previous 12 months at 38,000.

Again, one report is not a predictor, but the analysis of the June report along with the revision of March to 129,000 from 172,000 and April from 176,000 to 143,000, even accepting revisions as standard procedure is giving some economists pause, but especially with that drop in labor participation, from the household survey which gives a more accurate portrayal of American jobs than the business survey, the next quarter will bear watching.

February Jobs bottoming out against background of war

Friday’s Jobs report from the US Labor Dept. caused quite a shock to lawmakers, economists and investors with its loss of 92,000 jobs - a sudden departure from the rosy optimism of previous months that had seemed to show greater resilience in the employment sector, despite uncertainty across many related sectors, including the Trump tariffs, a K shaped economy, and the low-hire, low-fire mantra of many employers. All of which now seems to affect any potential rate cuts at the next Federal Open Markets Committee meeting, and any effects of the ten day old American Israeli war against Iran.

On the consumer side, gasoline, especially for America, the major focus is on the cost of crude oil which as a consequence of the war which on Monday surged to over $100 per barrel creating even more uncertainty than possible rate cuts; and, the residual effects on energy, and food supplies, not to mention its transportation are now overshadowing the February job losses.

The stock market indices were lowered, and then rose on Monday and then lowered again, giving some hope to investors, but with no predictable end in sight of the war despite reports to the contrary from the White House and the Defense Dept. who are predicting a short duration, despite a heightened level of uncertainty from many quarters.

The February highlights included a decrease in what seemed to be the iron clad area of health care, now taking a dip to 28,000 after a peak of 77,000 in January, shattering some who believed it to be a new standard for job seekers.

“Offices of physicians lost 37,000 jobs in February, primarily due to strike

activity. Hospitals added 12,000 jobs. Over the prior 12 months, health care had added an average of 36,000 jobs per month,”  reported the Bureau of Labor and Statistics.

The nurses strike in New York was emblematic of the dangers of reliance, or over reliance, on one industry, despite the pressing needs of American baby boomers, Andrew Flowers, chief economist at Appcast, said in a statement. But even accounting for that, job declines are still present and he noted. “When labor market growth depends on a sole industry, we will inevitably end up with large swings like today,” Flowers said.

Social assistance driven by individual and family needs has increased to 9,000, with a concentration of over 12,000 for the aforementioned population; and, while the report does not give detail on who is receiving what type of services, it is believed to have come from those facing a decrease in such social program cuts, and work requirements for those receiving food assistance from the Supplemental Nutrition Assistance Program, and some Medicaid cuts.

While the unemployment rate, what we prefer to call the marquee rate, nudged up slightly to 4.4 percent, inflation has increased to 2.4 percent, (still over the Federal Reserve target range of 2 percent) and wages while holding steady for higher income earners at $37.82,an increase of 0.4 percent; and while wages are up for some for others they are not for many American working families (especially those without college degrees) covering the high cost of a dwindling supply of affordable housing, a great challenge.

Wholesale inflation in January climbed to 0.5 percent with the producer price index reported by the Labor Dept. in late February, driving year over year prices from December, and in January 3.6 percent, both higher than forecasted, according to The Associated Press. Key to that were the tariffs from the president, and while many retailers and wholesalers stockpiled products before they were put in place, there were still some passed onto consumers.

With groceries still higher than consumers want, and the threat of increased prices due to the war, it’s important to note that gasoline and energy can account for 70 percent of the costs. This threat to oil exports that must travel through the Strait of Hormuz, and Iranian government threats to bomb any oil bearing cargo ships using that route are panicking wholesalers despite a statement on Tuesday by an American official that a ship was recently escorted through the straits; but, that statement was later retracted causing even more concerns in global markets.

"In February, average hourly earnings for all employees on private non farm payrolls rose by 15 cents, or 0.4 percent, to $37.32. Over the past 12 months, average hourly earnings have increased by 3.8 percent. In February, average hourly earnings of private-sector production and nonsupervisory employees rose by 9 cents, or 0.3 percent, to $32.03."

That may not be the total picture, however and “Wage growth remained healthy, at 3.8 percent over the year. Average hourly earnings have been slowing very gradually, but remain relatively steady, suggesting that hiring is not being constrained solely by the supply of available workers,” noted The New York Times.

Looking back at year over year statistics and seeing the loss of up to 317,000 federal job losses in 2025, and for 2026 is a sobering thought: “213,000 to 260,000+ federal employees left the workforce through various voluntary and involuntary mechanisms,” according to web searches.

The Joint Economic Committee Report from Congress reported that, “Revised numbers from December show 65,000 fewer jobs from a gain of 45,000 to end with a loss of 17,000 jobs. January’s report revised down by 4,000 from a gain of 130,000 to end at 126,000. Taken together, employment in December and January was down 69,000 more than previously reported.”

Revisions for previous months are standard operating procedure for the Labor Dept, and caution should always be taken to avoid making large judgements on the basis of one month’s report; but, taking into consideration the politics of economics and President Trump’s falling poll numbers on his handling of the economy, plus the war, there is greater overall concern from many quarters on what the American economic outlook will look like in future months.

Looking at the nervousness among many observers, lawmakers and investors, plus the overall statistics and patterns, and the revisions, the Times reported: “Revisions to previous months bolstered the case that the job losses in February were consistent with a broader trend rather than a blip. Employers shed 17,000 in December, and hiring figures for January were also revised downward slightly. Taken together, job growth for the last three months effectively slowed to zero.”

When it comes to the labor pool, the decrease in immigration, commingled with the Trump administration crackdowns on immigrant labor, we are also seeing “slower growth in the supply of labor. That has made it difficult to determine if a slowdown in job growth is caused by decreasing demand for workers, fewer available job-seekers or a combination of both,” added the Times.

All in all the general view, the war excepted, reaction has been alarming, “Today’s jobs report was overwhelmingly disappointing — there’s no other way to say it,” Cory Stahle, economist for Indeed Hiring Lab, said in a statement, and reported by truckingdive.com who also added as others have observed, “Today’s data show that the labor market has averaged essentially zero net job creation over the past six months,” Stahle continued. “This is concerning because when an economy stops creating jobs, it’s often not long before it starts losing them.”

Reaction from the White House has

remained positive and has expressed optimism, with this stance: “I think it’s consistent with everything else we’re seeing, which is the economy is really strong,” Kevin Hassett, the director of the White House National Economic Council, maintained in an appearance on CNBC.

With gasoline prices surging as of Tuesday to $3.50 cents per gallon, the president and his administration are facing a tough call, and with no clear objective of the war, critics are expressing concern, even among his own party; and, while defections, Marjorie Taylor Greene excepting, are not happening yet, at least, it’s anyone’s guess what the immediate economic future will bring, but in a recent poll by PBS/NPR/Marist 56 percent of those polled oppose the war against Iran giving some indication of public sentiment.

In earlier reportage, “[But] Mr. Trump and his top aides largely shrugged off higher gas prices all week, describing the increase as just another temporary blip.

“So, if we have a little high oil prices for a little while,” the president said at one point, “as soon as this ends, those prices are going to drop.”

December rate cut: A holiday gift from the Federal Reserve

Wednesday's rate cut by the Federal Reserve had been anticipated by some in our earlier coverage, but seeing is believing, and that news came with no data from the Bureau of Labor and Statistics due to the government shutdown, so the Federal Opens Market Committee made the decision with one armed tied behind their collective backs.

Consequently they also faced the dilemma of trying to meet its mandate of full employment and inflation at the rate of 2 percent creating division among its members, with some saying hold back on a cut, and full steam ahead by others, creating a first for that body.

The drop in the rate went down to a range: 3.5 to 3.75, to 0.25 percentage points. And The Hill reported that, “The FOMC approved the rate cut by a vote of 9 to 3, a smaller margin than the typical Fed rate decision. Fed board member Stephen Miran preferred to cut rates by 0.5 percentage points, while Federal Reserve Bank of Chicago President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid called for no cut at all.”

It should be no surprise that Miran, an ally of President Trump, wanted the larger cuts a bone of contention between the president and Federal Reserve head Jerome Powell.

Even allowing for a plurality of views, “The unusual number and nature of Wednesday’s dissents revealed how hard it could be for Fed Chair Jerome Powell — and his eventual successor — to keep the FOMC united with the economy at a foggy crossroads” reported The Hill and added,”The last time three FOMC members voted against a Fed move was in September 2019, when the Fed cut interest rates to unwind a series of previous increases meant to stave off inflation that never materialized."

At Wednesday’s press conference, Powell said,“Everyone agrees that inflation is too high, and we want it to come down, and agree that the labor market has softened and that there’s further risk. Everyone agrees on that.” 

Other reports from officials say that inflation might be acceptable at 3 percent as a new standard, yet that shift might be more philosophical than reflection of a true policy, beyond the traditional mandate of the Federal Reserve.

With perhaps the greatest understatement he added: “Where the difference is, is how do you weigh those risks? And what does your forecast look like?”

Powell’s term ends in May of 2026, and Trump is expected to name his successor in the near future; and, it’s no secret that the two have differed on the role and size of rate cuts, and the president did give some of his characteristic verbal bludgeoning to the Chair for the past several months.

The dilemma that Powell has faced, as we have noted many times before, is the balancing act between meeting the mandate and taking stock of inflation, plus the adjoining employment rate. While inflation has rebounded from earlier years when it was over 3 percent, especially in a post pandemic world, the current rate is still high, and is especially felt by low income Americans during their weekly grocery shopping; and, many are feeling that the president has not kept his campaign promise of lowering those prices, inasmuch as any president can.

Meanwhile employment has remained resilient, if shaky, in the face of economic uncertainty, mostly attributable to the billions of dollars in tariffs imposed by the president, what an earlier era called protectionism; and, the effect on hiring is significant as employers are trying to make do with what they have on payroll, and increasing hiring only when necessary, creating a slowdown in many areas, health care and hospitality excepted.

Consumer confidence has taken a hit, as are the poll ratings for the president now at 36 percent. And, while he has portrayed affordability as a Democratic hoax, the reality of higher prices and the ever increasing costs of housing have many American working families deeply worried about their economic future, not to mention meeting monthly bills, and feeding their children.

There is some optimism by some economists that consumer spending is steady but it;s important to note, as we did last month, that the increased spending is supported by high income earners, but lower income individuals and families face the above challenges, thus the infamous K shaped economy.

Currently it is estimated that there is $150 billion in tariff money sitting in reserve and the the president has said that some might be given to Americans in the form of a check, or to help pay for health care, but economists don’t see that as a viable option in either case, with the latter forcing people to confront, on their own, the behemoth of American health care giants.

The role of politics cannot be underestimated in examining the American economy but there are fears that many hardworking Americans may be caught in the middle.

On Thursday there were the initial jobless claims and while there was an increase to the tune of 236,000 and allowing for some holiday volatility, following previously lower numbers of 191,000, there are cautionary notes, according to Claudia Sahm, a former Fed economist, who told Fortune magazine that, “Initial claims don’t give you a sense of what’s coming,” she said. They’re what economists like to call a lagging indicator, meaning they tend to spike after a recession is underway, not before it. Recent weekly readings, distorted by holidays and special factors, are even less informative.”

Nevertheless, as Yahoo Finance reported, “Weekly initial claims tend to be choppy around the holidays and will likely continue to fluctuate through the end of the year, but Thursday’s figures are toward the higher end of readings seen in 2025. Companies like PepsiCo Inc. and HP Inc. have laid out plans to reduce headcount in recent weeks, and nationwide layoffs in October were the highest since early 2023.”

The future is on the minds of many and Powell, playing close to the vest, feels at best that shifting into neutral gear may be the best option but then again, as The New York Times opined, ”If there are signs that the unemployment rate might surge, that would probably prompt more officials to embrace the need to cut rates. So far, though, most policymakers do not appear worried, nor do they appear to be downbeat about growth. Projections released on Wednesday showed that most officials expected the unemployment rate to peak at 4.5 percent in 2025, before declining.”

Tariffs are still on the chart and it seems that Powell, and others, are waiting for the first quarter of 2026 to make an assessment, perhaps a code word for “wait and see.”

Updated on December 15, 2025

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