From


BLS:

Total
nonfarm
payroll
employment
increased
by
206,000
in
June,
and
the
unemployment
rate
changed
little
at
4.1
percent,
the
U.S.
Bureau
of
Labor
Statistics
reported
today.
Job
gains
occurred
in
government,
health
care,
social
assistance,
and
construction.

Bond
yields
fell
after
the
report
came
out,
which
means
the
market
interpreted
it
negatively.
But
why
is
that,
when
a
healthy
206,000
jobs
were
created?
First,
we
had
negative
revisions
to
the
prior
two
reports.
Even
with
that,
we
are
still
trending
above
my
target
of
140,000-165,000
as
we
get
closer
to
159
million
people
working
on
the
nonfarm
payroll
data
—
which
is
where
we
should
be
after
getting
all
the
jobs
back
that
we
lost
to
COVID.
But
the
unemployment
rate
did
tick
up
and
for
the
first
time
in
a
while
we
are
above
4%
now.

The
negative
revisions
to
the
previous
reports
put
the
3-month
average
roughly
at

177,000.
If
you
remove
government
jobs
from
the
equation,
we
are
running
at

146,000
jobs
per
month
on
a
3-month
average
so
we
are
getting
closer
and
closer
to
my
target.

The
one
thing
about
my
target
level
is
that
the
run
rate
of
employment
is
higher
now,
meaning
that
if
we
don’t
print
big
job
reports,
the
unemployment
rate
will
go
higher,
even
without
having
jobs
lost.
I
brought
this
up
in

last
month’s
article
on
the
jobs
report
and
have
often
talked
about
how
we
should
expect
higher
unemployment
rates
in
the
future.

Below
is
the
12-month
jobs
creation
data

The
Fed
has
been
worried
that
too
many
Americans
are
making
too
much
with
high
wage
growth.
So,
to
keep
this
as
simple
as
possible,
the
Fed
would
love
to
see
wage
growth
back
toward
3%
because
it
doesn’t
believe
the
productivity
data
is
as
strong
as
it
is
reported.
Wage
growth
is
cooling
down,
but
they
want
to
see
more
damage
done
here.

Below
is
the
12-month
wage
growth
data,
which
peaked
near
6%
in
2022
and
currently
is
at
3.9%. 

The
other
labor
data
we
had
this
week
(job
openings)
shows
that
the
Fed
is
getting
some
victories
over
the
labor
market.
The
job
openings
data
is
what
the
Fed
hangs
their
hat
on,
and
it
is
falling
noticeably.
As
we
can
see
in
the
chart
below,
we
have
a
historical
fall
in
this
data
line
from
12
million
to
8
million.
The
Fed
has
openly
said
that
the
job
openings
data
shows
the
labor
market
is
no
longer
tight.
The
black
line
below
shows
that
the
up
trend
in
this
data
line
is
broken.

The
jobless
claims
data
is
the
most
crucial
labor
data
line
we
have
right
now,
and
it
rules
them
all.
The
Fed
even
commented
on
this
data
in
a
recent
Fed
meeting
when
they
publicly
said
they
follow
jobless
claims
data,
which
had
been
heading
lower.
Well,
they
can’t
say
that
anymore
as
jobless
claims
have
been
rising
for
a
few
months
now.

The
4-week
moving
average
of
jobless
claims
data
is

238,500.
My
line
in
the
sand
for
a
job
loss
recession
is
when
this
number
breaks
above

323,000
on
the
4-week
moving
average.
I
am
hoping
the
Fed
doesn’t
wait
until
we
get
above
that
level
to
pivot.

Is
the
Fed
winning
the
war
against
the
labor
market?
Yes,
it
has
been
for
many
months
now!
So
what
is
their
next
move?
Do
they
wait
until
jobless
claims
break
over
323,000
before
sounding
more
dovish,
or
do
they
just
hide
their
heads
in
the
sand,
let
the
job
loss
recession
happen
and
chalk
it
up
to
the
need
for
defeating
inflation?

One
thing
I
have
stressed
since
2022
is
that
the
Fed
is
working
off
an
old
Fed
model
to
defeat
inflation
by
attacking
the
labor
supply
and
forcing
wage
growth
to
cool
down.
So
far,
they
can
chalk
up
a
lot
of
victories
against
the
American
labor
market.
So
the
question
for
the
second
half
of
2024,
is
whether
they
will
get
more
aggressive
on
talking
dovish
or
keep
using
the
token
line
“We
need
more
confidence”
before
they
act.
I
believe
they
want
to
see
more
labor
market
deterioration
before
they
pivot.
I
hope
I’m
wrong
on
this
premise
—
time
will
tell.