Jobs Market Shows Signs of Cooling as Summer Hits
Jobs Market Shows Signs of Cooling as Summer Hits
June is a huge month for hiring—for summer jobs, new college graduates, and teens. In a typical June, for example, employment rises 14% in amusement and recreation industries, and 7% in hospitality. Given strong recent growth in air travel, restaurant dining, and hotel occupancy—paired with a 15% year-to-date increase in the stock market and a recent rebound in consumer confidence—the June Jobs Report was poised to be another blowout. Instead, it showed signs of the labor market cooling—perhaps the result of the Fed’s rate hikes finally biting.
Job growth slowed to just 209K jobs—the smallest monthly gain since December 2020—and there were modest downward revisions for the prior two months. Other signs of slackening labor market conditions included a decline in temporary help services employment, a 452K increase in the number of workers who were part-time for economic reasons, and an increase to 6.0% in the unemployment rate for black workers, who are often the first to lose jobs when demand for workers eases.
The number of workers absent from work on vacation was lower than last year, suggesting perhaps that some workers have avoided taking vacations this year due to the high cost of travel.
Growth in average hourly earnings ticked upwards to 4.4% over the year, but given the decline in working hours over the past year, average weekly earnings only rose 3.7%, which is consistent with a continued slowdown in inflation.
On the bright side, the prime-age employment-to-population ratio continued to rise, hitting 80.9%, the highest level since 2001. Among women, it reached 75.3%, the highest on record. And looking forward, given that employment levels remain well below what they likely would have been absent the pandemic, future jobs reports are likely to continue showing strong job growth, partly driven by catch-up hiring in the industries hardest hit by the pandemic. Anyone who has been to a restaurant or airport lately knows America is still understaffed.
