Weekly Economic Trends and Indicators

The Headlines:

Total nonfarm payroll employment in the U.S. increased by 147,000 in June according to the Bureau of Labor Statistics (BLS), exceeding expectations. Job growth for April and May was revised up by a total of 16,000. The national unemployment rate decreased slightly from 4.2% to 4.1%. The unemployment rate has remained in a range from 4.0% to 4.2% since May 2024.

In a separate report, the BLS reported that total nonfarm payroll employment in the Davenport-Moline-Rock Island, IA-IL metropolitan area decreased by 100 to 181,500 in May on a seasonally adjusted basis. The most recent 3-month average growth was approximately zero jobs (seasonally adjusted). This marks the second consecutive month of decrease in the moving average. On a seasonally unadjusted basis, nonfarm payroll employment in the Quad Cities increased by 1,400 to 181,900, which is down by about 1,800 from May 2024. The unemployment rate for the metro area was 4.4%, up from 4.1% in April. The unemployment rate was under 5% in all counties and major cities in the metro area.

The Details:

The ADP Employment Report, which came out the day before the BLS report, showed a loss of 33,000 jobs in June. The ADP report captures a segment of the private labor market and is not always in step with the BLS report, which covers a wider population. Nevertheless, the difference in the two reports was notable in that the ADP report showed a decline in health care employment and a rise in manufacturing employment while the BLS showed health care growing and manufacturing unchanged.

Furthermore, much of the strength in the BLS report came from state and local government education (+63,500). Summer is a time when education jobs typically decrease, so this may be an anomaly in the seasonal adjustment that may reverse next month.

Employment in most sectors of the local economy was essentially unchanged in May. Mining, logging, and construction jobs were up 300 jobs to 10,700, and leisure and hospitality jobs increased 600 to 18,400. However, both categories were down more than 3% from a year ago.

The Context:

Although the headline number from the BLS was positive, there are areas of concern. Goods producing employment was essentially flat last month, and most of the job growth was in just a few sectors. The ADP report also noted that while layoffs are not currently a problem, hiring is slowing. The slowing of hiring in health care, manufacturing, and professional and business services had also been noted in the May Job Openings and Labor Turnover Survey (JOLTS) from the BLS. The JOLTS report for June will be highly anticipated for any signs of a broader slowdown in hiring.

Next week: Mid-year review