June’s nonfarm payrolls: 80,000

A few notes on the report as we make our way through it:

– This sentence caught our eye:

In the second quarter, employment growth averaged 75,000 per month, compared with an average monthly gain of 226,000 for the first quarter of the year.

Here’s to hoping that this is the end of the weather-related “payback” period. We suspect the actual pace of underlying jobs growth is somewhere between these two numbers (still not good enough) and it’s important to remember that this report has a lot of noise. But given the decline in PMIs recently in the US and elsewhere, it’s certainly possible that things are as bad as the top line suggests.

– That said, the other employment reports from earlier in the week (initial jobless claims, ADP private employment report, and the Challenger layoffs) all suggested a healthier economy than this morning’s payrolls. Just something to keep in mind.

– Revisions for the past two months were insignificant, essentially offsetting each other with April’s jobs number declining by 9,000 (to 68,000) and May’s revised up by 8,000 (to 77,000).

– The household survey, which had total employment increasing by 124,000, suggested a slightly better June than the establishment survey. The unemployment rate stayed flat, as the labour force increased by 156,000 people. The employment-population ratio also stayed essentially flat.

– Commentary from private sector economists are inevitably speculating on the extent to which this report increases the chances of QE3 or other measures from the Fed. We think yes, probably, but it will have to coincide with a durther decline in inflation and inflation expectations (which is also likely).

Keep checking back for rolling updates to this post, but for now here is the link and the topline info…

Consensus had been 90k (100k private payrolls), while revisions for May were positive. April’s wasn’t (-9000). From the BLS release…

Nonfarm payroll employment continued to edge up in June (+80,000), and the unemployment rate was unchanged at 8.2 percent, the U.S. Bureau of Labor Statistics reported today. Professional and business services added jobs, and employment in other major industries changed little over the month…

The change in total nonfarm payroll employment for April was revised from +77,000 to +68,000, and the change for May was revised from +69,000 to +77,000.