Thursday, July 2nd, 2026

Ending the trading week early with Friday’s observance of Independence Day, we cram together the last two “Jobs Week” data points: Weekly Jobless Claims and monthly non-farm employment. Pre-market indexes advanced further into the green immediately following these releases: the Dow is +300 points, the S&P 500 +35 and the Nasdaq +240 points. The small-cap Russell 2000, outperforming all major indexes in the first half of 2026, is up +18 points currently.

Non-Farm Payrolls Gain Only Half Expectations: +57K

Today’s Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) is out a day earlier than normal, coming in roughly half what analysts had been expecting: +57K, and well off the downwardly revised +129K for May, which itself fell from +172K originally reported (April was revised down from +179K a month ago to +148K in its final print). The Unemployment Rate dipped 10 basis points (bps) to +4.2%, the lowest in a year.

Before we dig too far into the details, let’s give some context to these shrinking jobs gains: this is the fourth-straight month of job growth from the BLS, which we haven’t seen since the spring of 2025. Before this positive string, we saw five of the previous nine months posting negative jobs numbers. In this way, the BLS figures are correlating with Wednesday’s private-sector payrolls from ADP ADP: perhaps weaker than recent trajectories had indicated, but positive jobs growth nevertheless.

Month over month Average Hourly Earnings were right in-line with expectations at +0.3%, where we also were a month ago and up 10 bps from March and April’s +0.2%. Year over year, Wages grew by +3.5%, also in-line, and up 10 bps month over month. We haven’t seen wage-growth figures notably adding to inflation levels since the last few months of last year — a positive for economists (like the Fed) who are looking closely at such things.

That said, Labor Force Participation disappointed at +61.5% — the weakest number since May of 2021, when these figures had been ramping up. This helps explain the dip in Unemployment, but not in a good way. A weakening participation rate is not a positive sign for what otherwise looks like a relatively healthy labor market. The U-6 rate, aka “real unemployment,” dips 20 bps month over month to +7.9%, the lowest since +7.7% reported a year ago.

By industry, Professional & Business Services led the way, somewhat surprisingly: +36K, followed by Social Assistance at +28K and Healthcare +22K. Manufacturing grew by only +3K and Construction was “little changed” — strange, considering that we’re busy with data center buildouts across the country. Leisure & Hospitality, once the leading force in domestic job creation, lost -61K for the month, including -55K in Food Services. This is remarkable in that many analysts had expected a boost to this industry based on the U.S. hosting the FIFA World Cup this summer at various locations around the country.

Perhaps we’ll need to see some revisions in the coming months to get a better idea of how summer jobs growth has transpired this year. The good news is we’re out of the trough we’d spent much of the last year in — all jobs numbers say so. But it appears the numbers aren’t quite so robust as they initially appeared.

Weekly Jobless Claims Narrow, Stay Consistent

One of the steadiest series of labor data going back a year or more has been Weekly Jobless Claims, of which Initial Jobless Claims came in at +215K last week. This is down -5K from expectations, and a slight dip from the upwardly revised +216K the prior week. For the past year and a half or so, this is where we’ve averaged seeing new jobless claims, aside from a couple dips and jumps here and there.

Continuing Claims, posted a weeks in arrears from Initial Claims, reached 1.814 million, a smidge up from the downwardly revised 1.812 million for the previous week. Though we’re now above 1.8 million for the third-straight week, we remain well off the +1.9 million and higher we routinely saw every week last fall. Again, muted positive jobs data — but that’s a lot better than it might be.

What to Expect from the Market Today

Factory Orders for May come out after the opening bell and June Auto Sales will report throughout the course of the day today. We expect low trading volume based on the three-day weekend ahead of us. We’ll see if market gains in the early session sustain themselves ahead of the close, which is the regular 4pm ET this afternoon.

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