OK, time for a 💹🧵: Starting with the unemployment rate, which ticked up to 4.1%. That's still low, but it marks the end of a historic period of unemployment at or below 4%. #NumbersDay
The increase in the unemployment rate doesn't quite trigger the "Sahm Rule" that indicates a recession has probably begun, but it's over the level that suggests recession risks are elevated.
Job growth was strong in June, with a gain of 206,000 jobs. But that strength was dampened somewhat by downward revisions to April and May. On a three-month-average basis, job growth is the weakest it's been since January 2021.
The diffusion index, which measures how broad-based job growth is, ticked up in June, but it has been falling pretty steadily. That suggests that even as overall job growth has remained solid, more sectors are cutting jobs and fewer are adding them.
Three sectors -- government, health care and leisure and hospitality -- have dominated recent gains. In June, it was really just two, as hiring slowed in leisure and hospitality.
One other important area of strength in June: construction, which added 27k jobs and has been surprisingly resilient despite high rates. Much of that growth is in nonresidential construction, where there has been a factory building boom spurred in part by fed. investment under the Biden admin.
Back to the household survey: Despite the uptick in unemployment, the household survey was pretty solid this month. The prime-age employment rate held steady, and prime-age participation actually rose.
