The June jobs report came in stronger than expected, offering a positive signal for the labor market. But other signs in the economy point to continuing uncertainty.
Here’s what we covered in this month’s Kenan Institute economic briefing.
Hiring Beats Expectations
The economy added 147,000 jobs in June. Unemployment dipped to 4.1%, and wages held steady, pointing to a labor market that’s still holding up.
Mixed Signals from Consumers
Consumer sentiment rose slightly, but confidence in the job market and business outlook declined. Expectations for the next six months fell, pointing to caution around future spending.
Likely No Fed Rate Cut
People are spending less, but inflation hasn’t fallen enough for the Federal Reserve to lower interest rates this month. A cut later in the year is still possible if inflation continues to slow.
Labor Shortage Hits Housing
Over 1 million foreign-born workers left the labor force this spring, affecting construction and housing starts in states like Florida, Texas, and California. New home building fell by 8%.
Waiting for What Comes Next
The risk of a deep downturn has eased for now. Strong hiring and easing trade tensions are both encouraging. But with weak consumer spending and uncertainty, all eyes are on Q2GDP numbers later this month.
“This relationship specifically between deportations and housing starts has been well documented in the past. … The time to start watching the relationship here that we see unfolding is now.”
— Sarah Dickerson, Research Economist, Kenan Institute of Private Enterprise
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