Highlights

  • June witnessed a deceleration in job growth, with 206,000 new jobs added — a net decline of 111,000 compared to revised estimates from prior months.
  • The unemployment rate rose to 4.1% from 4%, pointing toward a potentially weak economic scenario that needs scrutiny to avoid a recession.
  • New light-vehicle sales slumped 3.4% year over year in June due to disruptions from CDK’s DMS outage.

Employment Overview

June saw stronger-than-expected job growth; however, a deceleration was also observed:

  • 206,000 jobs were created, exceeding the expected 190,000.
  • Notably, the private sector only created 136,000 jobs, underperforming expectations.
  • Manufacturing experienced a loss of 8,000 jobs, while services generated 117,000 new positions.
  • Education and healthcare sectors observed the largest gain in the private sector, with 82,000 jobs created.
  • Despite the slowed growth, total payrolls exceeded February 2020 numbers by 6.3 million or 4.2%.

Unemployment and Earnings

The employment situation shows mixed signals:

  • The unemployment rate rose to 4.1%, a half percentage point year-over-year rise.
  • The labor force participation rate increased marginally to 62.6%.
  • Holding steady at 7.4%, the underemployment rate was slightly above February 2020 levels.
  • Average hourly earnings growth decelerated to 0.3% month over month.

Vehicle Sales and Prices

Sales and prices of new light vehicles took a hit:

  • Sales were down 3.4% year over year in June, with a 7.6% decrease month over month by volume.
  • June’s seasonally adjusted annual rate (SAAR) was 15.3 million, down from last year and last month.
  • Fleet sales, combining large rental, commercial, and government fleets, were down 8.7% year over year.
  • The average transaction price (ATP) of a new vehicle increased to $48,644 in June, marking the highest price since December. [Kelley Blue Book will publish the June ATP report on July 10. Check back in the Newsroom.]
  • Manufacturer incentives declined by 4.4%, though they were still up 52% year over year.

Overall, while job growth was stronger than expected, the increase in unemployment rate and decline in new-vehicle sales year over year signals potential economic weakening.