June employment report weak

We just got the latest payroll figures for June. They look weak, though not ridiculously so. Some of the details? Employment dropped 125,000 overall, roughly in line with the forecast of -130,000. That includes a huge drop in temporary Census workers. If you strip that out, you get an 83,000 increase in private sector jobs, somewhat below the 110,000 that economists were looking for. A separate household survey showed a loss of 350,000 jobs.

Meanwhile, the unemployment rate actually fell to 9.5% from 9.7%. But that's because the labor market overall shrank by 652,000 workers, meaning the decline in unemployment isn't really "good" news. Average hourly earnings dropped 0.1% compared with a 0.2% gain a month earlier and the +0.1% forecast. That's the worst performance I can see, but my data only goes back to 2006. The diffusion index, which tracks how many industries are adding workers vs. how many are cutting, weakened to 52.2 from 54.8 in the private sector. That's another disappointment.