Wut mean?

497,000 jobs popped up in June (Economists polled by the Wall Street Journal had forecast a gain of 240,000 private-sector jobs)
And you know what else grew? Annual pay! By a sweet 6.4%.
All this data comes from the guys at ADP Research Institute and their buddies at the Stanford Lab, and they’re snooping on over 25 million of us….
What’s doing well? Service industries, and they’re adding jobs fast!
- However, they’re also a little stingy with wage growth, sorta like a hedge fund refusing to cover…
Some sectors were up (leisure and hospitality, trade, transportation, education, health services) while others were down (manufacturing, information, finance).
Here’s the rundown of how many jobs each sector gained or lost:
- Goods-producing: +124,000
- Service-providing: +373,000
  - Now, if we’re looking at this by region, the Northeast and Midwest were ‘winners’, raking in 250,000 and 162,000 jobs respectively.
  - The South lost 10,000 jobs.
  - And the West gained 83,000 jobs.
Job stayers saw their pay increase by 6.4%, down from 6.6% in May – bit of a slow down.
For job changers, pay gains have been slowing for 12 months straight, but STILL at 11.2%

At the same time, the number of Americans who applied for unemployment benefits last week rose to 248,000, putting them close to a two-year high:

So, for the week that ended on July 1, there were 248,000 new people who signed up for unemployment benefits.
- This is an increase of 12,000 people from the previous week.
But, the number from the week before was adjusted.
- They originally said 239,000 people signed up, but they changed it to 236,000.
- That’s like saying you thought 239 people came to your party, but you miscounted and it was actually 236.
There’s another number they look at called the 4-week moving average.
- It’s just an average of how many people signed up for unemployment over the past four weeks.
- This number went down by 3,500 to 253,250.
The unemployment insurance rate, which is the percentage of all workers who are getting unemployment benefits, stayed the same at 1.2%.
The number of people actually getting unemployment benefits in the week ending June 24 was 1,720,000.
- This is a decrease of 13,000 people from the week before.
The 4-week moving average for this group also went down to 1,746,500.
- This is a decrease of 8,750 from the week before.
The main takeaway is that more people signed up for unemployment this week, but overall, things are pretty steady.

The Federal Reserve has been given a dual mandate by congress—pursuing the economic goals of maximum employment and price stability.
The Fed and JPow in the past have stated ‘price stability’ is inflation at the rate of 2 percent, as measured by the annual change in the Price Index for Personal Consumption Expenditures (PCE).
The Fed views maximum employment as the highest level of employment that the economy can sustain over time. The Fed does not have a numerical target for the level of employment; rather, the Fed analyzes economic conditions.
The federal funds rate ( the rate that banks pay for overnight borrowing in the federal funds market ) is the Fed’s policy rate, which means it is the rate the Fed chooses to target to achieve its policy goals–the dual mandate.
Changes in the federal funds rate influence other interest rates that in turn influence borrowing costs for households and businesses as well as broader financial conditions.
The Federal Open Market Committee (FOMC) sets the target range for the federal funds rate with the upper and lower limits on the range

To fight inflation, FOMC has been raising the federal funds rate.
However, when interest rates go up, it becomes more expensive to borrow, so businesses are generally unwilling to add more workers and may have to reduce headcount to account for increased costs.
This generally places downward pressure on employment and wages
Rates have been going up:

However, as we have covered above, employment and wages are still strong–well above the Fed’s accepted 2% rate for wage growth.

Buckle up for a July rate hike!

The ADP jobs report for June showed private sector employment increased by 497,000 jobs and average annual pay grew 6.4%.
- This was largely driven by growth in service industries like hospitality, education, and health.
In contrast, the initial jobless claims report showed a slight uptick, with 248,000 people filing for unemployment in the week ending July 1, up by 12,000 from the previous week.
This might seem like a head-scratcher, right? More jobs but also more jobless claims? There are a couple of reasons why this might be the case–and I am sure other reasons will be shared in the comments:

Different data sources and timeframes: The ADP report is based on its payroll data and gives us a monthly picture, whereas the jobless claims report is a weekly measure based on the number of people filing for unemployment benefits. The two might not align perfectly because they’re capturing different timeframes and types of data.
Jobs are being created, but not everyone is being hired: The increase in jobs doesn’t necessarily mean everyone who wants a job gets one. Some people might not have the right skills for the new jobs, or the jobs might be in different places than where the job seekers are. The rise in jobless claims could reflect these mismatches in the labor market.