It’s The Economy That Matters: The Employment Situation

Several key economic indicators are released every week to help provide insight into the overall health of the U.S. economy. In this article, we explore three of the most important economic releases from the past week: the BLS employment report, job openings, and labor turnover (JOLTS), and the ADP employment reports. By examining these data points, we gain valuable insights into the health of the labor market and by extension, the overall economy.

Policymakers and advisors closely monitor economic indicators, such as the three in this article, to understand the direction of interest rates, as the data can significantly impact business decisions and financial markets. In the week ending on June 1st, the SPDR S&P 500 ETF Trust (SPY) rose 1.73% while the Invesco S&P 500® Equal Weight ETF (RSP) was up 0.53%.

Employment Report

The labor market continues to heat up. The May employment report revealed 339,000 jobs were added last month, well above the expected 180,000 addition. May’s job numbers were the largest increase seen in the past four months and marked the third consecutive month that job growth has accelerated. Additionally, the report indicated that the unemployment rate rose to 3.7%, wage growth slowed to 4.3%, and the participation rate held steady at 62.6%. Overall, the strong jobs report came as a surprise and illustrates a resilient labor market despite the Fed’s efforts to cool the economy.

Nonfarm Payrolls

Job Openings and Labor Turnover (JOLTS)

The April JOLTS report revealed that the number of job openings rose for the first time in three months. In April, Job openings increased by 358,000 from the previous month, reaching a total of 10.103 million. While economists anticipated an increase, the actual figure exceeded expectations of 9.775 million vacancies. Other key data points from the report showed that the number of hires and quits were little changed at 6.1 million and 3.8 million respectively, while layoffs fell to 1.6 million.