Analysts had expected the economy to add 230,000 jobs in June, with average hourly earnings slightly above median estimates and the unemployment rate coming in largely as anticipated.
Mike Fratantoni, senior vice president and chief economist of the Mortgage Bankers Association (MBA), said that “conflicting signals” in incoming economic data meant the Fed was unlikely to deviate from its rate-hiking path later this month.
Economic activity is set to continue cooling for the remainder of 2023, he said, before picking up again next year.
“Manufacturing activity remains quite weak, while consumer spending has held up somewhat better, and new home construction and sales have picked up,” he said in comments reacting to the report. “Our forecast is for a slowdown in economic activity in the second half of 2023, with a recovery in early 2024. The June employment report reinforces that forecast.
“While job growth and wage growth are trending down, both are still well above the pace that would be consistent with the Federal Reserve’s inflation target. We now expect that the FOMC [Federal Open Market Committee] will raise the federal funds target another 25 basis points at its July meeting.”
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