June’s jobs report; May’s construction spending, factory inventories, and JOLTS

Major agency economic reports released last week included the Employment Situation Summary for June and the Job Openings and Labor Turnover Survey (JOLTS) for May, both from the Bureau of Labor Statistics, and two May reports that will input data into 2nd quarter GDP: the May report on Construction Spending and the Full Report on Manufacturers’ Shipments, Inventories and Orders for May, both from the Census Bureau…the week also saw the results from the last regional Fed manufacturing survey for June: the Dallas Fed’s Texas Manufacturing Outlook Survey, which also covers adjacent western Louisiana and southeastern New Mexico, reported its general business activity index slipped to 0.0 in June from +0.4 in May, with the zero and the near-zero readings indicating almost no change in manufacturing business activity from April, when a small plurality of Texas businesses had reported worsening business metrics than in March..

Privately issued reports released this week included the ADP Employment Report for June, wherein the national payroll processor reported a 98,000 increase in private jobs in June; the light vehicle sales report for June from Wards Automotive, which is the source data for the BEA report, and which estimated that vehicles sold at a 16.4 million seasonally adjusted annual rate in June, up from the 15.5 million annual rate in May, and up from the 15.34 million annual rate in June of 2025; the S&P CoreLogic Case-Shiller home price indexes for April from S&P Global, which are based on a 3-month average of February, March and April closing prices, and which reported that their national home price index was 0.8% higher than over the same three months of a year ago, when the Case Shiller Index indicated a 2.7% year over year price increase from April 2024, and the widely watched manufacturing purchasing manager’s survey from the Institute for Supply Management (ISM): the June Manufacturing Report On Business indicated that the manufacturing PMI (Purchasing Managers Index) fell to 53.3% in June, down from the four year high of 54.0% in May, which means that a smaller plurality of manufacturing industry purchasing managers reported improving conditions in various facets of their business in June than a month earlier

Employers Added 57,000 Jobs in June, Labor Force Participation Fell 0.3%

The Employment Situation Summary for June indicated an increase in payroll jobs that was only half of what had been forecast, and that significantly fewer Americans were considered either employed or unemployed in June than were in May, leading to a sharply lower labor force participation rate…seasonally adjusted estimates extrapolated from the establishment survey data projected that employers added 57,000 jobs in June, after the payroll job increase for May was revised from 172,000 to 129,000 jobs, and the April jobs increase was revised from 179,000 jobs to 148,000….with those revisions, that means that this report actually indicates a decrease of 17,000 jobs than from what was reported last month, compared to expectations for a 113,000 job increase….those revisions also lowered the average job gain to 92,000 per month over the past six months, less than the average 98,000 growth in the working age population….the unadjusted data indicates that there were actually 432,000 more payroll jobs in June than in May, as seasonal job increases that are typical in June for sectors such as construction, trade and transportation, and leisure and hospitality were normalized by the seasonal adjustments…

Seasonally adjusted job increases in May were spread through the private goods-producing and services sector and government, with jobs in the leisure and hospitality showing a notable decrease of 61,000 jobs due to the seasonal adjustment (actual leisure and hospitality jobs rose by 159,100, 61,000 less than were expected at the beginning of summer) …. since the BLS summary of the job gains by sector is clear and usually as detailed as our usual synopsis, we’ll just quote from that summary here:

• Total nonfarm payroll employment changed little in June (+57,000), roughly in line with the average monthly change over the prior 12 months (+36,000). In June, employment continued to trend up in professional and business services, social assistance, and health care. Employment in leisure and hospitality declined. (See table B-1.)
• Employment in professional and business services continued to trend up in June (+36,000). The industry has added 172,000 jobs since a recent low in October 2025.
• Social assistance added 25,000 jobs in June, primarily in individual and family services (+17,000). Over the prior 12 months, social assistance had added an average of 16,000 jobs per month.
• In June, employment in health care continued its upward trend (+22,000) but at a slower pace than the average monthly gain over the prior 12 months (+38,000). In June, hospitals added 9,000 jobs.
• Leisure and hospitality employment declined by 61,000 in June, reflecting weaker than usual seasonal hiring. Thus far in 2026, employment in the industry has shown little net change.
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; other services; and government...

The establishment survey also showed that the average hourly pay for all employees rose by 13 cents to $37.64 an hour in June, after it had increased by a revised 10 cents an hour in May; at the same time, the average hourly earnings of production and nonsupervisory employees increased by 7 cents to $32.38 an hour….reporting from employers also showed that the average workweek for all private payroll employees was unchanged at 34.3 hours, while hours for production and non-supervisory personnel fell a tenth of an hour to 33.7 hours….At the same time, the manufacturing workweek was down a tenth of an hour to 40.3 hours, while factory overtime rose a tenth of an hour to an average of 3.2 hours..

Meanwhile, the seasonally adjusted extrapolation from the June household survey estimated that the count of those who reported being employed fell by an estimated 507,000 to 162,264,000, while the similarly estimated number of those counted as being unemployed fell by 213,000 to 7,015,000; which together meant that June saw a total decrease of 720,000 in the total labor force…since the working age population had grown by 112,000 over the same period, that meant the number of employment aged individuals who were not in the labor force rose by 832,000 to a record 105,808,000….the decrease of those in the labor force was enough to lower the labor force participation rate from 61.8% in May to 61.5% in June, which was also down from 62.3% in June of 2024 and the lowest rate since March 2021….at the same time, the decrease in the number employed vis a vis the increase in the population was enough to lower the employment to population ratio, which we could think of as an employment rate, from 59.2% in May to 59.0% in June, its lowest since October 2021…meanwhile, the decrease in the number counted as unemployed was enough to lower the unemployment rate, which fell from 4.3% in May to 4.2% in June….at the same time, the number who reported they were involuntarily working part time fell by 124,000 to 4,681,000 in June, which meant that the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, fell from 8.1% in May to 7.9% in June…

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there…note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it alongside the press release to avoid the need to scroll up and down the page..

Job Openings and Job Quitting Little Changed in May, Hiring Slows, Layoffs Up a Bit

The Job Openings and Labor Turnover Survey (JOLTS) report for May from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 9,000, from 7,585,000 in April to 7,594,000 in May, after April’ job openings were revised 33,000 lower, from the 7,618,000 reported last month to 7,585,000…May’s jobs openings were also 3.9% higher than the 7,310,000 job openings reported for May a year ago, while the job openings ratio expressed as a percentage of those employed was unchanged at 4.6% in May, but was up from 4.4% in May a year ago…the greatest percentage increase in May job openings was in real estate and rental and leasing, where openings rose by 40,000 to 112,000, while job openings in finance and insurance fell by 69,000 to 264,000 (see table 1 for more details)…like most BLS releases, the press release for report is easy to understand and also refers us to the associated tables for the data cited, which are all linked to at the end of the release…

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which includes retirements and deaths….in May, seasonally adjusted new hires totaled 5,170,000, down by 45,000 from the revised 5,215,000 who were hired or rehired in April, while the hiring rate as a percentage of all employed remained at 3.3% in May, but it was down from the hiring rate of 3.4% in May a year earlier (details of hiring by industry since February are in table 2)…meanwhile, total separations rose by 63,000, from 5,038,000 in April to 5,101,000 in May, while the separations rate as a percentage of the employed rose was unchanged at 3.2% in May, which was still down from the separations rate of 3.3% in May a year ago (see table 3)…subtracting the 5,101,000 total separations from the total hires of 5,170,000 would imply there was an increase of 69,000 jobs in May, less than the revised payroll job increase of 129,000 for May reported by the June establishment survey later in the week, but still within the expected +/-110,000 margin of error in these incomplete extrapolations…

Breaking down the seasonally adjusted job separations, the BLS reports that 3,065,000 of us voluntarily quit their jobs in May, up by 22,000 from the 3,043,000 who quit their jobs in April, while the quits rate, widely watched as an indicator of worker confidence, remained at 1.9% of total employment in May, which was down from the 2.1% quits rate of a year earlier (see details in table 4)….in addition to those who quit, 1,708,000 were either laid off, fired or otherwise discharged in May, up by 41,000 from the 1,789,000 who were discharged in April, while the discharges rate rose 0.1% to 1.1% of all those who were employed during the month, which matched the 1.1% discharges rate of a year earlier… meanwhile, other separations, which includes retirements and deaths, were at 349,,000 in May, were unchanged at 328,000 in May, for an ‘other separations’ rate of 0.2%, the same as in April and as in May of a year ago….both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed using the links to tables at the bottom of the press release…

Construction Spending Rose 0.1% in May; with April Increase, Adds 20 Basis Pts to 2nd Quarter GDP

The Census Bureau’s report on construction spending for May (pdf) estimated that May’s seasonally adjusted construction spending would work out to $2,210.2 billion annually if extrapolated over an entire year, which was 0.1 percent (±0.7 percent)* above the revised estimate of construction spending at an annual rate of $2,207.1 billion in April, but 1.5 percent (±1.3 percent) below the estimated annualized level of construction spending in May of last year…with this release, unadjusted construction spending data was revised back to January 2024 and seasonally adjusted data was revised back to January 2019…as a result of that and the usual monthly revision, the April spending estimate was revised 1.6% higher, from $2,172.4 billion to $$2,207.1 billion, while the annual rate of construction spending for March was also revised 1.6% higher, from $2,164.5 billion to $2,199.4 billion…the $34.9 billion upward revision to annualized March construction spending should have a  notable positive impact on first quarter GDP when the annual revisions to GDP are released in late September, but since 4th quarter construction was also revised, the entire quarter over quarter inflation adjusted change will need to be recomputed to determine the ultimate impact…after revisions, construction spending tor the first 5 months of 2026 amounted to $858.4 billion, 2.7 percent (±1.0 percent) less than the $882.2 billion in construction spending for the same 5 months of 2025…

A further breakdown of the different subsets of construction spending are provided by a Census summary, which precedes the detailed spreadsheets, is included below:

• Private Construction: Spending on private construction was at a seasonally adjusted annual rate of $1,669.0 billion, virtually unchanged from (±0.5 percent)* the revised April estimate of $1,668.5 billion. Residential construction was at a seasonally adjusted annual rate of $930.2 billion in May, 0.3 percent (±1.3 percent)* above the revised April estimate of $927.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $738.7 billion in May, 0.3 percent (±0.5 percent)* below the revised April estimate of $741.3 billion.
• Public Construction: In May, the estimated seasonally adjusted annual rate of public construction spending was $541.2 billion, 0.5 percent (±1.5 percent)* above the revised April estimate of $538.6 billion. Educational construction was at a seasonally adjusted annual rate of $113.4 billion, 0.6 percent (±1.5 percent)* above the revised April estimate of $112.8 billion. Highway construction was at a seasonally adjusted annual rate of $150.6 billion, 0.6 percent (±4.4 percent)* above the revised April estimate of $149.6 billion.

This construction spending report will be used as source data for 3 subcomponents of GDP; investment in private non-residential structures, investment in residential structures, and government investment outlays, for both state and local governments…. however, gauging the impact of the revised April and May construction spending as reported here on 2nd quarter GDP is difficult because all figures given in this report are in nominal dollars and as you know, data used to compute the change in GDP must be adjusted for changes in price…accurately adjusting construction spending for price changes is no easy matter, either, because the National Income and Product Accounts Handbook, Chapter 6 (pdf), lists a multitude of privately published deflators that are used by the BEA for the various components of non-residential investment, ie, such as using the Engineering News Record construction cost index for utilities’ construction….in lieu of trying to find and adjust for all of the obscure price indices the BEA uses, we’ve opted to just use the producer price index for final demand construction as an inexact shortcut to make an aggregate price adjustment sufficient to make a rough estimate…that index showed that aggregate construction costs were 0.2% higher in May, after being down by 0.1% from March to April, up by 0.1% from February to March, and up by 0.1% from January to February…

On that basis, we can estimate that May’s construction costs were roughly 0.1% more than those of March, and roughly 0.2% more than those of February, and 0.3% more than those of January, and were obviously 0.3% higher than those of April…we then use those percentages to adjust spending in each of those months for the differences in the price of construction vis a vis that of May….annualized construction spending in millions of dollars for the five months in question is given here as 2,210,214 for May, 2,207,051 for April, 2,199,399 for March, 2,189,683 for February, and 2,195,636 for January….thus to figure the annual rate of change of the average of May’s nominal construction spending figure of $2,138,215 and April’s figure of $2,145,537 from those of the ‘inflation adjusted’ figures of the first quarter, our calculation becomes (((2,210,214 + (2,207,051 * 1.002)) / 2) / (((2,199,399 * 1.001) + (2,189,683  * 1.002) + (2,195,636 * 1.003)) / 3) ) ^ 4 = 1.021163547, which means that after adjusting for inflation, real construction has been rising at a 2.12% annual rate over the first 2 months of the second quarter.…put another way, that would mean real construction spending has been rising at a $11.5 billion annual rate, which means that if June construction shows no improvement, the 2nd quarter growth of real construction would add a net of about 0.20 percentage points to 2nd quarter GDP across those components that it influences…

Factory Shipments Rose 1.6% in May; Factory Inventories Rose 0.2%

The Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) for May from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods decreased in value by $8.5 billion or 1.3 percent to $657.4 billion in May, following a 5.3% increase to $665.9 billion in April, which was revised from the 4.8% increase to $662.7 billion reported for April last month….however, since the Census Bureau does not even collect data on new orders for non durable goods for this widely watched “factory orders report”, both the “new orders” and “unfilled orders” sections of this report are really only accurate as a revised update to the May advance report on durable goods we reported on last week…on those revisions, the Census Bureau’s own summary, which precedes their detailed spreadsheet of the metrics included in this report, is quite clear and complete, so we’ll just quote directly from that summary here:

• Summary: New orders for manufactured goods in May, down following four consecutive monthly increases, decreased $8.5 billion or 1.3 percent to $657.4 billion, the U.S. Census Bureau reported today. This followed a 5.3 percent April increase. Shipments, up seven of the last eight months, increased $10.3 billion or 1.6 percent to $653.2 billion. This followed a 1.3 percent April increase. Unfilled orders, up twenty-two of the last twenty-three months, increased $9.2 billion or 0.6 percent to $1,579.5 billion. This followed a 1.8 percent April increase. The unfilled orders-to-shipments ratio was 6.91, down from 6.95 in April. Inventories, up eight consecutive months, increased $2.1 billion or 0.2 percent to $962.0 billion. This followed a 0.3 percent April increase. The inventories-to-shipments ratio was 1.47, down from 1.49 in April.
• New Orders for manufactured durable goods in May, down following two consecutive monthly increases, decreased $15.5 billion or 4.5 percent to $332.2 billion, unchanged from the previously published decrease. This followed an 8.5 percent April increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $18.5 billion or 14.0 percent to $113.4 billion. New orders for manufactured nondurable goods increased $7.0 billion or 2.2 percent to $325.2 billion.
• Shipments of manufactured durable goods in May, up eight of the last nine months, increased $3.3 billion or 1.0 percent to $328.0 billion, unchanged from the previously published increase. This followed a 0.7 percent April increase. Transportation equipment, up seven of the last eight months, led the increase, $1.5 billion or 1.4 percent to $109.5 billion. Shipments of manufactured nondurable goods, up six consecutive months, increased $7.0 billion or 2.2 percent to $325.2 billion. This followed a 1.9 percent April increase. Petroleum and coal products, up five consecutive months, led the increase, $5.6 billion or 8.5 percent to $71.7 billion.
• Unfilled Orders for manufactured durable goods in May, up twenty-two of the last twenty-three months, increased $9.2 billion or 0.6 percent to $1,579.5 billion, unchanged from the previously published increase. This followed a 1.8 percent April increase. Transportation equipment, up nine of the last ten months, led the increase, $3.9 billion or 0.4 percent to $997.8 billion.
• Inventories of manufactured durable goods in May, up eight consecutive months, increased $0.9 billion or 0.1 percent to $600.0 billion, down from the previously published 0.2 percent increase. This followed a 0.3 percent April increase. Primary metals, up fifteen consecutive months, led the increase, $0.5 billion or 1.0 percent to $50.8 billion. Inventories of manufactured nondurable goods, up four consecutive months, increased $1.3 billion or 0.4 percent to $362.0 billion. This followed a 0.4 percent April increase. Chemical products, up two consecutive months, led the increase, $0.7 billion or 0.6 percent to $130.2 billion.

To estimate the effect of those May factory inventories on 2nd quarter GDP, they must first be adjusted for changes in price with appropriate components of the producer price index….by stage of fabrication, the value of finished goods inventories rose 0.2% to $325,730 million, the value of work in process inventories rose 0.1% to $273,432 million, and the value of materials and supplies inventories rose 0.4% to $362,822 million…the May producer price index reported that prices for finished goods were on average 2.8% higher, that prices for intermediate processed goods were 3.5% higher, while prices for unprocessed goods averaged 4.9% higher….assuming similar valuations for like types of inventories, those producer price changes would suggest that May’s real finished goods inventories were about 2.6% less than April’s, that real inventories of intermediate processed goods were about 3.4% lower, and that real raw material inventories were about 4.5% lower…however, since real NIPA factory inventories were also quite a bit lower over the 1st quarter, accounting for all of the 1st quarter inventory drop, after offsetting the impact of increased retail and wholesale inventories, and since this report also seems to indicate a sharp decrease in May's real inventories, following a decrease in April, the impact of 2nd quarter factory inventories on the growth rate of 2nd quarter GDP will be determined by which quarter has the larger decrease…if it’s the first quarter, then the drop of real factory inventories in the 2nd quarter could still add to GDP, by an amount equal to the difference between the quarterly decreases…

(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts, contact me…)