US Hiring Falls to 57,000 in June as Confidence Stays Gloomy
Five different economic reports came out this week. Nearly all of them point back to the same source of strain.
US employers added just 57,000 jobs in June, less than half of May's total, while consumer confidence stayed well below its pre-pandemic norms despite a small monthly improvement.
The Jobs Picture Weakens
The unemployment rate actually declined to 4.2% from 4.3% in May, but that drop happened mostly because people gave up looking for work and were no longer counted as unemployed.
Job gains initially reported for April and May were also revised lower, adding to the sense that hiring has cooled more than first thought.
The figures suggest companies remain wary of the economy's health, with inflation sitting at a three-year high alongside consumer confidence near post-pandemic lows.
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Consumers Are Still Gloomy, Just Slightly Less So
The Conference Board's consumer confidence index rose 0.6 point to 91.2 in June, still below its year-ago reading of 95.2.
Before the pandemic, that index regularly topped 120, underscoring how far sentiment remains from historical norms even with gas prices easing slightly this month.
Consumer attitudes worsened sharply after the Iran war caused oil and gas prices to spike, accelerating inflation and pushing Americans' inflation-adjusted incomes down.
📰 Read Also: CPI Report Shows US Inflation Climbs to 4.2% as Fed Pressure Builds
The Common Thread Behind the Numbers
Nearly every figure released this week connects back to the same event: the war between the US and Iran that began in late February disrupted the flow of crude oil from the Persian Gulf, sending oil prices sharply higher and dragging inflation, bond yields and mortgage rates up with them.
That's a different story than a typical slowdown, where weak demand or a specific sector problem usually drives the numbers.
Here, a single geopolitical shock is still working its way through hiring decisions, consumer psychology, and borrowing costs months after it began, which is part of why the recovery in each indicator has been so gradual.
Borrowing Costs Ease, But Only Slightly
The average 30-year fixed mortgage rate fell to 6.43% this week from 6.49% the week before, according to Freddie Mac, its lowest level since mid-May.
A year ago, the average rate stood at 6.67%, meaning today's rate is actually a modest improvement despite months of turbulence.
The rate has mostly hovered around 6.5% since the Iran war began, easing only as oil-driven inflation pressure has started to fade.
📰 Read Also: Mortgage Rates Fall to One-Month Low, Relief Already Fading
Jobless Claims Stay Historically Low
Applications for unemployment benefits fell by 1,000 to 215,000 in the week ending June 27, below the 225,000 new applications forecast by analysts surveyed by FactSet.
The four-week moving average, which smooths out weekly noise, fell by 2,500 to 222,000.
Weekly filings are considered close to a real-time indicator of the health of the job market, and this reading suggests layoffs remain at historically healthy levels even as fresh hiring slows.
Job Openings Hold Steady, But Hiring Doesn't Follow
US job openings stayed at a surprisingly strong 7.6 million in May, ahead of the 7 million economists had forecast, according to Bureau of Labor Statistics data.
But actual gross hiring dipped to 5.17 million in May from 5.26 million in April, a sign employers are advertising roles without following through on filling them at the same pace.
During the job market boom from mid-2021 to mid-2023, gross monthly hiring regularly topped 6 million, making May's pace look sluggish by comparison even with openings holding firm.
Layoffs also rose in May, while the number of people voluntarily quitting jobs — typically a signal of worker confidence — ticked up only slightly.
TL;DR
- US employers added just 57,000 jobs in June, less than half of May's pace.
- The unemployment rate fell to 4.2%, largely because fewer people are actively job-hunting.
- Consumer confidence rose slightly to 91.2 but remains well below pre-pandemic levels above 120.
- The average 30-year mortgage rate eased to 6.43%, its lowest since mid-May.
- Job openings held at 7.6 million in May, but actual hiring slowed to 5.17 million.
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Financial Markets Reporter
Tom Bennett covers cryptocurrency, stocks, and macroeconomic trends. With a background in economics, he delivers sharp analysis on the stories moving markets.
