Welcome to Yahoo Financ's special

coverage of the May jobs report of the

June jobs report rather. I'm Broo Mama.

I want to bring in Jennifer Lee of

Capital Markets, senior economist.

Jennifer, good morning. I I I mean there

is such expectations that we are going

to set another month of growth here.

What's your expectations and what would

you consider a win in this sort of

environment?

>> Uh good morning Brooke and thank you

very much for having us on. You know, um

I don't even know what to expect right

now. We're well I mean we are actually

looking for about 125,000 increase in

jobs but slower than the previous month

but it would be still the fourth month

in a row of gains. Um I would consider a

win. Anything over 100,000 I think at

this point would be considered a win. Um

but there all these different things

like we got to look beyond the headline

even though yours truly is very guilty

of that. you know, all the details, what

happens with the jobless rate, what

happens with the other survey, the

household survey, all the different

industries that are hiring or or firing

and of course all those other things

like hours worked and average hourly

earnings. So, lots of things to look at,

but of course, the big reaction will be

whatever the headline number is going to

be.

>> Jennifer, uh, what would a good jobs

report look like for this market? What

exactly are we looking for? because

there's this rhetoric on the street that

if we do get this really robust strong

jobs market that could lead to the

Federal Reserve definitely hiking rates,

>> right? So, I think in the in my Okay, so

that's a bit of a tough question, but I

would personally would like a strong uh

report because obviously strong growth

or strong uh uh job growth would mean a

stronger US economy, which I think is

good for the entire world. Um, of

course, it would mean that interest

rates would have to be nudged higher.

Now when that's going to happen is is

another story. Keep watching inflation

of course but you know I think at the

end of the day like we all want stronger

a stronger uh US economy and I think

that's better again you know for for the

for the bigger perspective for the for

the world as a whole.

>> Are you worried at all that we could see

major revisions this morning and

revisions meaning you know we go back a

few months and maybe we didn't add as

many jobs as we had expected or maybe we

even could have added more than we had

previous than the government had

previously reported.

That's another reason why we could never

just look at the headlines specifically.

I mean, there are always revisions going

back um uh last couple of months.

Generally, they're on the downside, but

I think the prior month that we just the

most recent month that we had, we

actually saw some upward revisions. So,

that is I mean, as long as the entire

story stays intact that the job market

is I'm going to borrow from Mary Daily

this morning when she the headline is

saying that the labor market has

stabilized and I think that would be

good way to describe it. is even if it's

like downward revisions, but at least

we're still seeing gains. Jobs are

hovering around 4.3%. You know, there

could be some upside risk to that

number. By the way, you know, it just

broader picture would just mean overall

a stabilizing yet slowing job market I

think would be almost a Goldilocks kind

of story.

>> Now, you did mention that, but the

unemployment growth potentially growing

again at 4.3% once again potential

upside risk there. What does that sort

of tell you? Could that be lingering

moving into the second half of the year

given this dynamic backdrop where we

still have that ongoing conflict with

Iran and you know there there's some

discussion about inflation and what do

you expect for wage growth moving

forward and how worried are you that

wage growth is continuing to be below

that inflation rate. So, I'm just

looking for for earnings, we're looking

for about three times increase. But I

think overall, just judging from what we

saw from the personal income data just a

week or so ago, steady gains in wages is

the bottom line, the the what we need u

at the bare minimum. Just so consumers

have a steady income, they have money

coming in, they don't have to spend it

all at once, and that's totally okay as

long as they have the the support of

again jobs and higher wages. And yes,

inflation is still high and that's

eating away at wages, but we're starting

to see inflation coming down. Obviously,

this big drop in energy prices is going

to be is going to be a big plus for the

uh for headline inflation going forward

when we probably saw um peak inflation

back in May. But at the same time,

there's still a lot of stickiness in the

inflation numbers.

>> Jennifer, I want you to stick around. I

want to remind our viewers about what

exactly the expectations are moving into

this report. Once again, this is a

breaking news special for the June jobs

report here at Yahoo Finance. Right now,

we're looking at expectations based upon

Bloomberg estimates that the change for

the month of June in the non-farm

payrolls will be 113,000 jobs added. So,

this would be another sequential month

of jobs growth following pretty robust

job growth in the latest month. Uh just

to compare to previous months, we did

have job growth of 214,000 jobs in

March, 179,000 jobs in April added. May

172,000. So if we do get another job uh

additions of about 113,000, this would

signal the fourth consecutive month of

job gains for the US economy. Also

moving right along into the rest of the

report, Bloomberg estimates that we are

going to see average hourly earnings of

3.5%

and unemployment of staying steady at

4.3%. These are all worth noting. We're

getting the numbers breaking in. Once

again, this is breaking news for the

June jobs report. The numbers just

crossing the wire. 57,000 jobs were

added to the US economy in the month of

June. That's far less than the 113,000

that economists had forecasted based

upon Bloomberg estimates. Also, we have

average hourly earnings for the month of

June coming in line with estimates at

3.5% and unemployment actually coming in

a tick lower than what economists had

forecasted at 4.2%. Economists had

expected 4.3%.

And so ultimately what we're seeing here

is less jobs added to the US economy

during the month of June than expected.

Also taking a look at the month of May.

Previously the government have reported

that 172,000 jobs were added. But now we

did get some revisions. Now we now see

that 129,000

jobs were added in the month of May

instead of that robust 172,000. And so

something definitely to watch there. I

do want to bring in our uh panel this

morning because let's break it all down.

We have Jennifer Lee, Capital

Markets senior economist still with us.

We also have Brian Jacobson Annex Wealth

Management chief economist and

strategist as well as Vashal Kandulja

Morgan Stanley, senior portfolio

manager. Uh Jennifer, I want to go to

you. We were just chatting about

expectations that you wanted to see a

number between 100 to 150, clearly well

below what economists had forecasted

here.

Yeah, very disappointing. Um, okay. So,

I'm going to stretch here and say at

least we saw a plus sign, but 57,000 is

obviously uh pretty low. Interesting

that that jobless rate uh ticked lower

down uh uh down to 4.2% uh very very low

uh and is still a sign of a tight uh

labor market. I would love to see some

of the details there about what happened

to household employment. Um but it also

shows that we have to take all these

other surveys and this is something that

you know Fed Wars has said in the past

and yours truly has been totally on

board with this. You can never look at

one survey in you know uh uh in a in uh

as as as the as the only one to look at.

Um you got to look at all the different

surveys and this month by the way there

have been such a mix of uh numbers that

are pointing to positive signs from the

job market and ones that were pointing

on the negative side. Um, so again,

everything has to tell a similar story

and this was one very um confusing, I'm

going to say month uh to to glean, but

definitely very disappointing headline.

>> Michelle, I want to get to you because

you had noted within your notes prior to

support coming out that the Fed's

challenge increasingly centers on

whether labor demand remains too strong

to bring inflation sustainably back to

that 2% target. What does this mean?

Because we are seeing right now futures

move higher based upon this report. We

have all three major indices up about

onetenth of a percent here or even more.

>> Hey, good morning Brooke and thanks for

having me on. Yeah, this is a fantastic

report. Actually, this is exactly what

the Fed could have hoped for. Gives

enough uh to take out some of the quirks

that were coming through the labor

market over the last two to three

months. The one-off hiring numbers that

we had started to see. So, some of the

revisions might be that I still have to

take through the numbers as we talking

live. uh the less participation could be

leading up to the lower unemployment

rate. Umployment is also lower. So the

strength is there. I mean the stability

in the labor market that we saw in the

first 3 months of the year versus the

derailing labor market data that we

started to get last part of 2025. So

that's good. We were in that stable low

higher low fire economy. The worry was

are we moving into more higher and low

fire economy than then could lead into

inflation. So this report actually uh

puts enough sort of in the uh market

that the Fed in July at least could take

another breather or a pause if you will

look at more data not only with the

labor market but the CPI that will come

through after the oil prices decline and

find a little bit more time to dig

through the data to make their decision

about the rate hike by the end of the

year. Brian, I'm diving into the details

a little bit here and one of the

expectations moving into this report was

that leisure and hospitality was going

to be strong and yet in the month of

June we actually lost 61,000 jobs. We

did see the largest gains as we've been

seeing over the past few years really in

healthcare where 69,000 jobs were added.

What do you make of that?

Yeah, it's been really interesting. If

you think about uh I was expecting that

last month we would have seen a big

increased leisure hospitality mostly

because you do get that localized hiring

especially in those areas that are

sponsoring or hosting some of those

World Cup games. And maybe this is some

of the payback. Maybe they already kind

of did the hiring ahead of time and they

don't need as much. But we also know

from the retail sales reports, right,

people went from filling up their

bellies and going to food and uh bars to

filling up their gas tanks. And so maybe

we're still seeing a little bit of

transition there where people had cut

back on some of the discretionary items.

They were eating more at home instead of

eating out. So perhaps we're seeing some

of that. Um I'm not reading too much

into it just because that leisure and

hospitality number can be very volatile.

What I actually do like in this report

is that we have seen improvements in

construction and manufacturing. I think

that's a positive. The uh diffusion

index that's contained within there. So

kind of think about it. If it's above

50, that means that more companies

within that industry or more industries

are expanding employment than

contracting. So that is now above 50 not

only for the private sector as a whole

but also with manufacturing. So even

though the headline number 57,000 is uh

disappointing seeing that decline in

leisure and hospitality, I think the

underlying message here is the economy

has the job market went from that sprint

of you know three months of a in a row

of incredible gains to more of a jog.

>> Val, you were also looking for that FIFA

World Cup related job gains. So what do

you make of this? And also I do want to

know, Brian, you had mentioned

construction adding jobs. I want to note

that that was about 11,000 job gains.

Manufacturing was about 3,000. Uh Val,

what do you make of this?

>> Rehires again as uh as you just

mentioned uh on on that one. So that's

why a little bit payback from that one.

I think the the first thing that I

mentioned was is the is the economy

moving from stable to a growth in the

labor market. The two other things that

we were digging through or trying to

find clues in this report for one was is

it spreading to other sectors? Is it

widespread job growth that we had seen

in 2022 and 2023? And then the last one

are is the labor market able to demand

higher wages. So that means is there a

pass through of strength in the labor

market going into inflation? We don't

think that we got enough clues for the

Fed uh to have a much hawkish

reactionary function to this specific

report. Again, CPI and PC yet to be seen

over the next two months before the July

and the September meeting and the

Jackson Hole that is coming up in

August. But we did not get very

clear-cut clues for a hike here. So

definitely that's what the market is

telling us uh right after the report as

well. The bull steepening that you're

seeing in cur slight relief rally going

through equities and risk asset is

you're repricing some of the hawkish

expectations that were built in for July

and also taking off a little bit of

those September cuts that were getting

built in.

>> Jennifer I want to dive into the

unemployment rate because we did see

unemployment come in a little bit lower

just a tick lower than what we had

previously expected. Economists had

forecasted 4.3%. We got overall

unemployment coming in at 4.2%.

The report also noting here that

unemployment rates show little uh show

little change. We're now at 7.1 million

people who are unemployed here in the

US. What do you make of this report? And

also, we've been hearing so much about

teens in particular struggling to find

jobs in this labor market. Right now, we

have 16 to 19 year olds seeing a 13%

unemployment rate. Are you worried at

all that this number is consistently

higher?

Um I am a little bit concerned. So it's

interesting that uh the the labor force

took a big um um step back about 700,000

people and uh uh and of course the

household employment number fell by

500,000. But overall I mean just uh

breaking down by the age group. It

looked like most of the age um um

brackets saw a drop in in the jobless

rate. But for sure um the the the teens

uh the young people, you know, people of

our future are having a very difficult

time finding work. And this is like a

story that is playing out around the

world. We're seeing double digit jobless

rates for like teenagers and across

Europe and here in Canada as well. Um so

that is a concern and you know no one

really knows you what are they going to

be doing when they when they graduate as

well. So this is all part of it. I also

noticed interestingly that uh

information u services um the sector

also cut jobs. So I don't know if this

is like another signal that AI is taking

is starting to creep its way into the

job market. Um um even more so we saw

that in the challenger gray uh and

Christmas report that mentioned that

technology is one of the uh driving

forces for all the layoffs. Um so

overall you know not a very uh hopeful

picture I guess uh for for teenagers

right now. Um um but at least you know

they're hopefully they'll be finding

jobs in other sectors um uh growing

sectors outside of uh the ones that have

been negatively impacted by AI.

>> Yeah, you had noted there information

sector that sector specifically lost

9,000 jobs. Val, are you worried about

the impact that AI is having on the

workforce? Because it seems like we kind

of push that narrative aside, but yet

maybe there is that undertone of how

this is impacting the overall economy.

>> Definitely. Yes. I think the narrative

in the market and then among some of the

you know notable economists as well was

that we are going to quickly go into

that 1990 style productivity boom here

uh in the US uh given the AI uh advent

beginning of the beginning of the year

2026 and I think what what we are

realizing right now the amount of capex

first of all data center and power that

is going through has multiplier effects

in in growth and jobs also I think the

multiplier effect from coming from

adaptability and adoption of AI uh

within companies like oursel and

processes as well needs a lot more

hiring and a little bit more

inflationary at the at the onset and

then expect a little bit more of that

productivity boom on dis disinflationary

but right now I think to uh to the point

that was that was raised about the teen

unemployment and the uncertainty that

it's causing the amount of teens

changing their careers or changing their

sort of majors within undergraduate is

at all-time highs as well because the

uncertainty that AI is causing and what

jobs will be uh prevalent going in the

next two to five years here as well. So

quite a bit of uncertainty but we've not

seen mass layoffs if you will from that

side and that's why I think the low

higher lowire is is is what I take away

the theme from this unemployment report

as well.

>> Brian, you are Kevin Walsh. You just

stepped into the sea. You have another

meeting in about 27 days. How is he

looking at this report this morning

given that he does not provide forward

guidance that we we don't necessarily

see maybe as much of put through or or

insight as we did from Fed chair former

Fed chair drone pal.

>> Yeah. Well, I think there's an important

distinction between not giving forward

guidance and then not being transparent.

And I think he is trying to be very

transparent about uh what he is seeing

in the data or more what he has seen.

And so when he spoke yesterday in

Portugal on that panel discussion, I

thought that it was notable that he

mentioned about how inflation

expectations have begun to moderate over

the last few weeks. And you would expect

that as gasoline prices move lower,

inflation expectations typically also

move lower. But also what you're seeing

in the financial markets as far as with

break evens and inflation swaps

confirming the idea that maybe we're

past the peak in terms of the fear about

persistently high inflation. And now

this I think gives him a little bit he

can wipe his brow and be like, "Okay,

good. We don't have an overheating labor

market." So they're not stuck in this

position where maybe they want to hike.

I think this is actually a pretty good

report for him to say, you know what,

the labor market is still solid. Think

about the unemployment rate. It moved

lower, but not for a good reason. It

moved lower because the labor force

shrank, right? So there's enough uh

strength in the labor market that he

doesn't have to worry about the Fed

needing to run to the rescue. But with

inflation expectations moderating, he

also doesn't need to run to the kind of

frontr run those inflation expectations

and try to hike. So it puts him in a

place where economists, you know, on the

one hand you do this, on the other hand

you do that. Well, they can sit on both

hands now because they don't have to do

anything.

>> Brian, quickly want to follow up because

we are seeing NASDAQ futures up the most

about 510 of a percent this morning.

What does this environment where we

could see a Federal Reserve sort of hold

tight because of this report mean for

big tech moving forward?

>> Well, I think that it's actually a

favorable setup if the Fed is doing

nothing. And I think that's actually

what Kevin Walsh wants. He doesn't want

the market to worry about what the Fed

is going to do. He wants the market to

worry about what the macro numbers are

telling them. And I think what the macro

numbers are telling us is that as long

as we get earnings continuing to post,

you know, these big gains expectation

22% year-over-year increase, that's

really, I think, what's going to help

drive the market. I mean, the Fed is a

fundamental force in the markets, but he

actually, I think, wants more earnings

to be the fundamental focus of the

markets.

>> Jennifer, Brian, and Vash, thank you all

so much for helping us break this down

this morning. I really appreciate it.

>> Thank you.

And just to recap, 113,000 jobs added.

Stay tuned for Morning Brief at 9:00

a.m. Eastern when more coverage on

today's on today's top job headlines for

the June jobs report. Once again, that

is 57,000 jobs added. My bad. Uh 113,000

was the expectation there. 57,000 jobs

added in the month of June. Unemployment

at 4.2%.

Much more ahead on Yahoo Finance.

Heat.

Heat.