logo
Why Wall Street got the jobs number so wrong

Why Wall Street got the jobs number so wrong

Yahoo04-07-2025
Wall Street analysts underestimated June's U.S. jobs report, expecting weak growth due to negative private payroll data and President Trump's angry social media posts. Today, analysts have explanations for their error: 'Seasonal noise' around government hiring skewed the numbers upward, they say, and payrolls are in fact pretty weak. Meanwhile, global markets saw mild declines today, partly from profit-taking after recent highs.
You may have noticed yesterday that there was a bunch of chatter prior to the U.S. Bureau of Labor Statistics' latest report that the number of new jobs created might be lower than the 110,000 consensus estimate. Analysts at Goldman Sachs, UBS, and Pantheon Macroeconomics all said they thought the number might be weaker than predicted. The ADP private payroll report, published before the official government number, showed a 33,000 decline in jobs.
In the event, the number of nonfarm payroll jobs increased by 147,000 in June, the bureau said—way above expectations.
So why did so many people get this wrong?
The fact that President Trump was tweeting angrily about U.S. Federal Reserve Chair Jerome Powell the night before distracted many, who read into those social media posts that perhaps he had seen a preview of the jobs report, didn't like it, and was—as usual—trying to set up Powell as the fall guy.
That turned out to be a false signal.
A day later, the analysts have sifted the labor data and now have explanations for their errors. The report does show signs of weakness in private company hiring, these analysts say, it's just that it is being masked by a sudden seasonal bump in government and education jobs.
'Private demand for labor is slowing,' Pantheon's Samuel Tombs said in a note to clients after the official number came out. 'The robust headline figure is entirely due to a massive 80K increase in state and local government payrolls, of which 64K are education jobs. … This large boost probably will unwind in July.'
'Private payrolls excluding healthcare and education rose by just 23K, well below the 50K average pace in the previous 12 months. Fundamentally, then, this is a weak report,' he said.
UBS analyst Paul Donovan took a similar line: 'The US June employment report was strong enough in the headline to dispel ideas of a sudden US interest rate cut. It was troubling enough in the detail to suggest a more negative outlook for the US economy. Job creation was very narrowly focused.'
As did Bruce Kasman et al at JPMorgan: 'The June surge in state and local hiring likely reflects seasonal noise.'
Same tune at Daiwa Capital Markets: 'Private-sector payroll growth totaled only 74,000, only a bit more than half of the approximately 143,000 average in the prior six months and the weakest reading since last October when the Fed was initially easing monetary policy in a recalibration designed to support the labor market,' said Lawrence Werther and Brendan Stuart.
Nonetheless, jobs are jobs. The overall unemployment rate stayed roughly the same. Analysts have largely been expecting Trump's tariff regime to damage the U.S. economy (tariffs make everything more expensive and thus suppress hiring) but that damage still hasn't really showed up—yet.
'The data suggest that firms are not yet slashing payrolls but are instead responding to policy uncertainty by slowing hiring,' Daiwa's Werther and Stuart said.
The U.S. markets are closed today for the Independence Day holiday.
In their absence, global markets—many of which are at or near their all-time highs—seem to be selling off a bit to solidify their recent gains. Stoxx Europe 600 fell 0.76% in early trading.
The biggest drama was in South Korea, where the Kospi lost 1.99% after a sharp recent climb. It's not clear if that was triggered by anything other than traders locking in their gains, but Trump's announcement that he would begin sending letters to foreign countries today imposing tariffs of between 10% and 70% likely did not help.
Here's a snapshot of the action from this morning.
S&P 500 futures are trading down 0.58% today.
The S&P 500 hit yet another record high yesterday after rising 0.8%.
Nasdaq Composite rose 1% yesterday.
China's CSI 300 was up 0.36% this morning.
Japan's Nikkei 225 was flat.
Stoxx Europe 600 fell 0.76% in early trading.
South Korea's Kospi lost 1.99% after a sharp recent climb.
This story was originally featured on Fortune.com
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Dätwyler Holding AG (VTX:DAE) Interim Results: Here's What Analysts Are Forecasting For This Year
Dätwyler Holding AG (VTX:DAE) Interim Results: Here's What Analysts Are Forecasting For This Year

Yahoo

time4 minutes ago

  • Yahoo

Dätwyler Holding AG (VTX:DAE) Interim Results: Here's What Analysts Are Forecasting For This Year

Shareholders of Dätwyler Holding AG (VTX:DAE) will be pleased this week, given that the stock price is up 18% to CHF147 following its latest half-year results. Dätwyler Holding reported in line with analyst predictions, delivering revenues of CHF563m and statutory earnings per share of CHF1.83, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Following last week's earnings report, Dätwyler Holding's five analysts are forecasting 2025 revenues to be CHF1.11b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 179% to CHF4.98. Before this earnings report, the analysts had been forecasting revenues of CHF1.13b and earnings per share (EPS) of CHF4.52 in 2025. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result. Check out our latest analysis for Dätwyler Holding The consensus price target was unchanged at CHF153, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Dätwyler Holding at CHF219 per share, while the most bearish prices it at CHF125. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business. Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Dätwyler Holding's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.4% growth on an annualised basis. This is compared to a historical growth rate of 5.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Dätwyler Holding is also expected to grow slower than other industry participants. The Bottom Line The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dätwyler Holding's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Dätwyler Holding's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Dätwyler Holding analysts - going out to 2027, and you can see them free on our platform here. We don't want to rain on the parade too much, but we did also find 5 warning signs for Dätwyler Holding that you need to be mindful of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

South Korea to prepare mutually agreeable trade package as US tariff deadline looms
South Korea to prepare mutually agreeable trade package as US tariff deadline looms

Yahoo

time4 minutes ago

  • Yahoo

South Korea to prepare mutually agreeable trade package as US tariff deadline looms

SEOUL (Reuters) -South Korea will prepare a trade package that is mutually agreeable with the United States ahead of minister-level meetings planned next week and a U.S. tariff-pause deadline of August 1, the presidential office said on Saturday. The package will include shipbuilding cooperation, a sector of high interest to U.S. Commerce Secretary Howard Lutnick, who discussed the matter with South Korea's Industry Minister Kim Jung-kwan on Friday, it said in a statement. South Korea's Finance Minister Koo Yun-cheol and Foreign Minister Cho Hyun will also hold meetings with U.S. Treasury Secretary Scott Bessent and State Secretary Marco Rubio, respectively, next week. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

5 job search habits young job seekers should ditch immediately
5 job search habits young job seekers should ditch immediately

Fast Company

time5 minutes ago

  • Fast Company

5 job search habits young job seekers should ditch immediately

After nearly four decades on Wall Street and over 15 years mentoring students and young adults, I've witnessed countless young professionals struggle with their job searches —not because they lack talent, but because they're trapped in counterproductive habits that sabotage their success before they even begin. The job market has never been more competitive. With AI tools and vast information resources now available to every applicant, the baseline for what constitutes a 'good' application has skyrocketed. Today's job seekers have access to sophisticated résumé optimization tools, interview prep platforms, and industry insights that previous generations could never have imagined. And that means that simply having a polished resume or knowing basic company facts no longer differentiates you from the competition. A saturated job market The COVID-19 pandemic intensified this competition exponentially. Economic disruptions created a massive pool of highly competent applicants—seasoned professionals who were laid off, recent graduates whose traditional entry points disappeared, and career changers seeking more stable industries—all competing for fewer available positions. What we're witnessing is an unprecedented bottleneck, where exceptional candidates are struggling to get through recruiting filters just because the volume of qualified applicants has overwhelmed traditional hiring processes. This saturation means that even talented individuals with strong credentials are facing rejection after rejection, not due to inadequacy, but due to sheer numbers. Employers who once received dozens of applications for a position now receive hundreds, forcing them to rely on increasingly narrow filtering criteria that can eliminate excellent candidates for arbitrary reasons. In this new landscape, it's the candidates who go above and beyond—who demonstrate genuine initiative, build real relationships, and create tangible value—who separate themselves from the pack. The tools are available to everyone, but it's how strategically and creatively you use them that determines your success. The reality is that most new job seekers are their own worst enemies, repeating the same ineffective strategies that virtually guarantee disappointment. If you're serious about launching your career, it's time to break these five destructive habits immediately. Stop the Spray-and-Pray Approach I see this mistake constantly: talented graduates treating job applications like a numbers game, firing off identical résumés to every posting they find. During my years at one of the largest banks in the United States, I reviewed countless résumés. The generic submissions were easy to spot and equally easy to dismiss. Employers aren't looking for someone who can fill any role—they want someone who genuinely understands (and is passionate about) their specific position. Every application should tell a story about why you and this particular company are a perfect match. Research the organization, understand their challenges, and demonstrate how your skills address their specific needs. Yes, this takes more time—but would you rather send 50 thoughtless applications that get ignored, or 10 targeted ones that actually generate interviews? Embrace LinkedIn as Your Career Command Center I'm amazed by how many job seekers still treat LinkedIn as an afterthought. In today's digital world, your LinkedIn profile is often your first chance to make an impression. Worse yet, many young professionals create a profile and then abandon it, missing countless opportunities for meaningful connections. Your LinkedIn presence should be as polished and strategic as your résumé. More importantly, it should be active. Share insights about your industry, comment thoughtfully on posts from professionals you admire, and regularly update your network on your career journey. We encourage young adults to view LinkedIn as a relationship-building platform, not just a digital résumé. The connections you make today become the foundation for opportunities in the future. Many of our most successful clients have landed positions through LinkedIn relationships they cultivated months before they even began their formal job search. Abandon the Perfect Role Fantasy One of the most career-limiting beliefs I encounter is the idea that you should wait for the perfect opportunity. Young professionals often turn down roles that don't match their exact vision, convinced that holding out will yield something better. This perfectionist mindset ignores a fundamental truth: careers are built through progression. Some of the most successful individuals I've mentored started in positions that seemed unrelated to their ultimate goals but provided invaluable experience and connections. Early in your career, prioritize learning and growth over title and salary. A role with exceptional mentorship, challenging projects, or exposure to senior leadership can be far more valuable than a prestigious position where you'll be isolated or underutilized. The goal is forward momentum, not immediate arrival at your destination. I often tell my mentees that your first job is rarely your last job, but it's always your launching pad. Choose roles that accelerate your trajectory, even if they don't perfectly align with your original vision. Master the Art of Strategic Follow-Up The job search doesn't end when you walk out of the interview room: that's when the real work begins. Yet countless candidates don't take full advantage of promising opportunities by failing to follow up appropriately. A thoughtful follow-up message accomplishes several critical objectives: it demonstrates your genuine interest, reinforces key points from your conversation, and keeps you visible during the decision-making process. More importantly, it shows that you understand professional norms and can manage relationships effectively. Your follow-up should be personalized, referencing specific moments from your conversation and reiterating how you can contribute to their team's success. This isn't about being pushy—it's about being professional and maintaining momentum. I've seen talented candidates lose opportunities to less-qualified competitors simply because they assumed their interview performance would speak for itself. In a competitive market, every advantage matters, and strategic follow-up can be the difference between getting the offer or being forgotten Stop Waiting Until Your Senior Year to Think About Career Strategy One of the most limiting mistakes I see is students who coast through their first few years of college without any career planning, suddenly panicking during junior or senior year when they realize competitive roles require years of preparation. Today's job market rewards those who think strategically early. The most coveted positions, whether in finance, consulting, technology, or other competitive fields, increasingly expect candidates to have meaningful internship experience, relevant projects, and established industry connections. Students who wait until their final years find themselves competing against peers who've been building their credentials since freshman year. But let me be clear: starting later doesn't doom your prospects. I've mentored countless students who discovered their career direction during their junior or senior years and still achieved remarkable success. The key is understanding that you'll need to accelerate your efforts and be more strategic about your approach. The real mistake isn't starting late; it's continuing to delay action once you recognize the importance of career planning. Whether you're a freshman or a senior, the best time to start building your professional foundation is right now. The Path Forward Throughout my career mentoring young professionals, I've watched talented individuals gain access to opportunities they never thought possible by simply approaching their job search with the same intelligence and intention they bring to other aspects of their lives. Remember, your job search can be a demonstration of your professional capabilities. Employers are evaluating not just what you've accomplished, but how you approach challenges, manage relationships, and execute strategies. The job market may be competitive, but it's not impenetrable. With the right approach, persistence, and strategic thinking, you can transform your job search from a source of frustration into a launching pad for the career you truly want.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store