The U.S. employment report for June released by the Labor Department today is a strange one, but it will provide the justification (or cover) for another big rate increase by the Federal Open Market Committee in the last week of July.
The report is always based on two surveys, seasonally adjusted—and their results were completely opposed. The survey of “establishments"—employers—reported a job gain of 372,000 in June, some 90% skewed to service jobs. But the survey of “households"—employees—found a loss of 315,000 jobs; an increase of more than 500,000 in eligible Americans out of the labor force bringing that number back to pandemic levels of a year ago; a shrinkage of the labor force overall by 350,000; and the increase in the average weekly wage from one year earlier was below 4%, well under half the official inflation rate.
