July 2024 Market Trends Report
The June jobs report announced the 42nd consecutive month of job growth, slightly outpacing economists’ expectations for June.
With 206,000 new payrolls, job gains increased solidly, yet the lion’s share was narrowly spread across several industries — with government and healthcare accounting for nearly 3/4 of the added payrolls.
According to the Bureau of Labor Statistics (BLS), June payroll additions included:
- 70,000 government jobs
- 49,000 healthcare jobs
- 34,000 social assistance jobs
- 27,000 construction jobs
The BLS also revised the April and May reports to 111,000 fewer jobs than originally estimated, uncovering a trend in slowing payroll growth.
Add to that diminishing wage growth and an unemployment rate that has slowly crawled up over the past three months, and we have a labor market that is becoming uncomfortably cool for some economists.
Ticking up to 4.1%, unemployment is still relatively low. However, as Indeed Hiring Lab Research Director Nick Bunker pointed out after the release of the jobs report: “A rate around this level is consistent with a strong labor market, but the level isn’t the issue: the steady rise is the troubling factor.”
At face value, the June jobs report looks solid, but month-over-month indicators signal an overall slackening labor market that could stand at the crossroads of a halt unless it begins to warm up.
Jobs Market Overview: June 2024
4.1%
Overall unemployment rate
The unemployment rate increased .1% for the third consecutive month — the highest since November 2021.
206k
Jobs added
June brought solid (yet diminishing) job gains month over month — with government and healthcare contributing to nearly 3/4 of the new payrolls.
62.6%
Labor force participation rate
Labor force participation rose slightly (.1% from May).
Industry Employment Trends
OVERALL ECONOMY
+206k
Monthly job change
(+1.7% YOY Difference)
| Industry | Monthly Job Change | YoY Difference |
| Manufacturing | -8k | 0% |
| Automotive | +5.9k | +3.5% |
| Warehousing & Storage | -2.3k | -2.3% |
| Architectural & Engineering | +4.9k | +2.4% |
| Construction | +27k | +2.9% |
Source: Bureau of Labor Statistics' Economic News Release
Sector by Sector News: June 2024
Manufacturing Jobs Report
June Manufacturing PMI: 48.8%*
Economic activity slumped across nearly all fronts in June, according to the Institute for Supply Management (ISM). The Services PMI contracted for the second time in the past three months, opposing its growth trend across 46 of the past 49 months.
With the exception of the New Export Orders Index, all Services PMI indexes contracted. This includes the Business Activity and New Orders indexes, sinking for the first times since May 2020 and December 2022 respectively.
Alongside a loss of 8,000 payrolls (the greatest sector loss in June, according to the Bureau of Labor Statistics), these metrics point to a slowing market and flattening sales.
However, Chair of the ISM Steve Miller countered any concerns: “Though the Services PMI contracted for the second time in three months, that was preceded by 15 consecutive months of growth, a contraction in December 2022 and 30 months of expansion before that. That indicates sustained growth for the sector, as the PMI has not recorded back-to-back months in contraction since April and May 2020.”
*A PMI reading below 50% suggests economic activity is contracting.
According to ISM:
Manufacturing industries in growth in June (listed in order):
- Other services
- Management of companies & support services
- Healthcare & social assistance
- Construction
- Utilities
- Finance & insurance
- Educational services
- Professional, scientific & technical services
Manufacturing industries in contraction in June (listed in order):
- Agriculture, forestry, fishing & hunting
- Real estate, rental & leasing
- Mining
- Retail trade
- Public administration
- Wholesale trade
- Transportation & warehousing
- Information
Construction Jobs Report
The construction industry continues to sidestep the cooling labor market with 27,000 jobs added in June. Nonresidential construction employers added the vast majority of jobs (21,200), including:
- Nonresidential specialty trade: 9,200 jobs
- Heavy and civil engineering: 6,300 jobs
- Nonresidential building: 5,700 jobs
The unemployment rate among construction workers is also the inverse of overall unemployment —dipping to 3.3% — the second lowest ever recorded.
If not for ongoing labor shortages that are constraining growth in the industry, Associated Builders and Contractors Chief Economist Anirban Basu estimates the number of added construction jobs would have been even higher in June.
Warehousing & Storage Jobs Report
May Logistics Manager’s Index (LMI): 55.3*
The warehousing and storage industry lost 2,300 payrolls month over month and year over year in June, yet the Logistics Manager’s Index (LMI) reports growth across six of its eight indexes. The exceptions are transportation utilization and inventory levels (which are unchanged and contracting respectively month over month).
Overall, the LMI has expanded for seven consecutive months and for 10 of the last 11 months.
*A LMI above 50 indicates that logistics metrics are expanding.
According to LMI:
Growth is increasing at an increasing rate for:
- Transportation prices
- Inventory costs
- Transportation utilization
- Warehousing capacity
- Warehousing prices
- Warehousing utilization
Growth is contracting for:
- Inventory levels