Jobs and Unemployment

The June jobs report points to a cooling labor market, with slowing wage growth, job gains concentrated in health care, declining prime-age employment, and no evidence that AI is boosting productivity.

While this month’s job growth numbers are fine, wage growth remains weak and the continuing concentration of jobs in the health care and social assistance sector does not suggest a strong economy overall.

Despite Trump’s claims of record investment, factory construction has declined sharply since its 2024 peak, following a surge driven by Biden-era industrial policies.

The June numbers should be good, but weak wage growth and other negative indicators are signs that workers do not feel positive about the state of the labor market.

Alan Greenspan’s legacy is mixed; he defied conventional wisdom on unemployment and inflation, but he badly mishandled two major bubbles. 

New labor market data show that mass deportation has not produced the promised employment gains for native-born workers, reflecting the complementary role many immigrants play in the economy.

Five key takeaways from the May jobs report include stronger-than-expected job growth, slowing real wages, worker caution about changing jobs, and little evidence that AI is reducing employment.

Despite some anomalies, the overall jobs picture looks positive, but that could change if the war continues and oil prices stay high.

The overall labor market story is somewhat positive; however, if wage growth continues to lag inflation, consumer demand will not be able to sustain growth going forward.

The latest JOLTS report’s jump in job openings is likely an anomaly, as declining hiring and worker turnover point to a softer labor market.