June Jobs Report
The labor market rebounded in June, as the report detailed strong gains in jobs created with the second quarter coming to a close. The total change in nonfarm payrolls increased by 222,000 jobs, well above the 178,000 figure economists expected for the month. Data was revised higher for April and May, as 47,000 were added bringing the three-month average to 194,000 jobs created during the second quarter. This figure was above the 166,000 average for the first quarter and is above the average of 187,000 jobs created for all of 2016. However, the Unemployment Rate increased to 4.4%, and the broader measure of unemployment which measures both full-time and part-time workers, the U6, increased to 8.6%. More workers entered the workforce during the month, which caused both measures of unemployment to increase. Still, it is encouraging to see more workers coming back as the number of people who went from out of the labor force to employed rose 4.7 million, the highest amount since 1990.
Despite the strong job creation for the month, the 0.2% growth in wages in June was below economists’ expectations, while the annual pace held steady at 2.5% year-over-year. Wage growth peaked at a 2.8% year-over-year pace back in February and have yet to hit 3% growth last seen during the Great Recession. Given the broad-based payroll gains, the weak growth in wages may start to turn later in the year as the labor market tightens. Consequently, inflation expectations have ticked up in recent weeks, with the yield on the 10-year Treasury bond going from a low of 2.12% in mid-June to 2.39% as of today. The strength in labor market along with increasing inflation expectations suggest that the Federal Reserve may raise rates at least one more time by the end of the year. Therefore, we continue to expect modest economic growth with a low probability of recession through the end of the year.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bouchey Financial Group, Ltd. [“Bouchey Financial”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, no portion of this discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Bouchey Financial. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Neither Bouchey Financial’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Bouchey Financial is engaged, or continues to be engaged, to provide investment advisory services. Bouchey Financial is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Bouchey Financial’s current written disclosure Brochure and Form CRS discussing our advisory services and fees is available for review upon request or at www.bouchey.com. Please Note: Bouchey Financial does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Bouchey Financial’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Bouchey Financial client, please contact Bouchey Financial, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.