Exploring Economic Indicators: June 2024 Employment

Economic indicators are released every week to provide insight into the overall health and performance of an economy. They serve as essential tools for policymakers, advisors, investors, and businesses because they allow them to make informed decisions regarding business strategies and financial markets. In the week ending on June 3, the SPDR S&P 500 ETF Trust (SPY) rose 1.09% while the Invesco S&P 500® Equal Weight ETF (RSP) was down 0.13%.

Some of the most closely watched economic indicators are those surrounding the labor market. They provide insight into the health of the economy. But they also impact individuals’ lives and play a central role in government policy decisions. Last week featured a handful of employment updates that provided insights into different aspects of the U.S. labor market. This article will discuss the key data points from each report and explore their potential implications.

Employment Report

The U.S. labor market added more jobs than expected last month, but still showed signs of cooling down. The June employment report revealed 206,000 jobs were added last month, exceeding the expected 191,000 addition. With that said, June’s jobs numbers were a slowdown from May’s downwardly revised 218,000 addition.

The report also revealed another increase in the unemployment rate to 4.1%, its highest level since November 2021. Additionally, hourly earnings increased 0.3% from the previous month and 3.9% from one year ago. Both readings marked a slowdown from May and were consistent with their respective forecasts.

Overall, the latest jobs report strengthens views that the Fed will begin to cut rates later this year. Despite last month’s Fed forecast of only one rate cut this year, the CME FedWatch Tool is currently projecting two; the first one at the September meeting and the second one at the December meeting.