The Fed is happy to see strong payroll gains and moderating wage growth in the June jobs report. Payroll gains of 372,000 and the unemployment rate remaining at 3.6% is simply a great jobs report. But the cherry on top is that nominal earnings are leveling off, easing fears of a wage-price spiral as inflation is at a 40-year high.
Here are some additional takeaways from the June jobs report:
Recouping COVID job losses within “spitting distance”
Every private industry gained jobs in June
Shift from goods to services may be materializing in jobs
Job seeker participation took a step back
No signs of a wage-price spiral as wage growth continues to cool
What does this mean for recruiters?
There is no sign of a recession in the June jobs report. Strong hiring trends conflict with other indicators (like the stock market and GDP) that suggest elevated recession risks. The intensity of competition for workers remains strong, even as interest rate hikes continue at a brisk pace. The continued cooling of wage growth is a favorable sign that the Fed’s goal of lowering inflation without triggering a recession is possible.
Bottom line: Aside from the decline in labor force participation – which may just be noise – this is a very strong jobs report. Hiring trends are very strong in the United States, even during a period where the Fed is aggressively hiking interest rates.
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