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July Jobs Cool to 187K, Unemployment Drops to 3.5%
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Pre-market futures were essentially flat directly prior to the latest Employment Situation report from the U.S. Bureau of Labor Statistics (BLS): 187K new jobs were created in the month of July, below the 200K expected but 2000 positions more than the downwardly revised 185K for June, which now marks the cycle lows going back to December of 2020, which greeted us with a loss of -268K jobs. The Unemployment Rate ticked down to 3.5%, below the 3.6% expected and posted last month. Cycle lows here are 3.4%, most recently in April of this year.
Hourly Wages, however, ticked up from expectations to +0.4%, matching last month and the previous three months. Year over year, this figure remains elevated at +4.4%, 20 basis points (bps) higher than analysts were looking for. The last time we were sub-4% on year-over-year wage growth was back in June 2021. This number points to sticky inflation in the economy, despite a lower total of jobs created overall. Revisions to the previous two months were -24K for June and -25K for May, to 209K.
Labor Force Participation remained static at 62.6% — this is a stubborn metric that appeared to be ramping up to pre-Covid levels but have stalled in recent months. For a frame of reference, February 2020 saw this rate come in at 63.3%; we have yet to regain that level. A lower Average Workweek, at 34.3 hours, equals the May low. And the U-6 (aka “real unemployment”) fell to 6.7%, the slimmest print since the cycle low 6.5% in December of last year.
Unlike months in the past, new job fills were not dominated by one or two industries — we saw decent growth along a wider swath of the overall economy: Construction grew by +19K new jobs, +17K came from Leisure and Hospitality (which registered a whopping +201K in Wednesday’s private sector report from ADP, so likely revisions in the coming months will help smooth this out) and +15K jobs were created in the Government sector. Manufacturing dropped -9K last month.
Q2 earnings season continues, although the fireworks ignited from the big marquee names have largely passed for the week, with Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) outpacing estimates on top and bottom lines. This morning, CBOE Global (CBOE - Free Report) beat earnings estimates by 2 cents to $1.78 per share (above the $1.67 per share reported in the year-ago quarter), notching its fourth-straight earnings beat on flat revenues (-0.02%) to $467.1 million (up from $424.1 million a year ago). Shares are up modestly in today’s pre-market, but only +11.6% year to date, underperforming the S&P 500’s +17.3%. For more on CBOE’s earnings, click here.
Image: Bigstock
July Jobs Cool to 187K, Unemployment Drops to 3.5%
Pre-market futures were essentially flat directly prior to the latest Employment Situation report from the U.S. Bureau of Labor Statistics (BLS): 187K new jobs were created in the month of July, below the 200K expected but 2000 positions more than the downwardly revised 185K for June, which now marks the cycle lows going back to December of 2020, which greeted us with a loss of -268K jobs. The Unemployment Rate ticked down to 3.5%, below the 3.6% expected and posted last month. Cycle lows here are 3.4%, most recently in April of this year.
Hourly Wages, however, ticked up from expectations to +0.4%, matching last month and the previous three months. Year over year, this figure remains elevated at +4.4%, 20 basis points (bps) higher than analysts were looking for. The last time we were sub-4% on year-over-year wage growth was back in June 2021. This number points to sticky inflation in the economy, despite a lower total of jobs created overall. Revisions to the previous two months were -24K for June and -25K for May, to 209K.
Labor Force Participation remained static at 62.6% — this is a stubborn metric that appeared to be ramping up to pre-Covid levels but have stalled in recent months. For a frame of reference, February 2020 saw this rate come in at 63.3%; we have yet to regain that level. A lower Average Workweek, at 34.3 hours, equals the May low. And the U-6 (aka “real unemployment”) fell to 6.7%, the slimmest print since the cycle low 6.5% in December of last year.
Unlike months in the past, new job fills were not dominated by one or two industries — we saw decent growth along a wider swath of the overall economy: Construction grew by +19K new jobs, +17K came from Leisure and Hospitality (which registered a whopping +201K in Wednesday’s private sector report from ADP, so likely revisions in the coming months will help smooth this out) and +15K jobs were created in the Government sector. Manufacturing dropped -9K last month.
Q2 earnings season continues, although the fireworks ignited from the big marquee names have largely passed for the week, with Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) outpacing estimates on top and bottom lines. This morning, CBOE Global (CBOE - Free Report) beat earnings estimates by 2 cents to $1.78 per share (above the $1.67 per share reported in the year-ago quarter), notching its fourth-straight earnings beat on flat revenues (-0.02%) to $467.1 million (up from $424.1 million a year ago). Shares are up modestly in today’s pre-market, but only +11.6% year to date, underperforming the S&P 500’s +17.3%. For more on CBOE’s earnings, click here.
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