Michael Eisenga, CEO of First American Properties, Issues Statement on June Jobs Report: 'Don't Be Fooled by the Headline'

Associated Press

03-07-2025

COLUMBUS, Wis., July 03, 2025 (GLOBE NEWSWIRE) -- In response to today's release of the June 2025 employment report, Michael Eisenga, CEO of First American Properties, cautioned policymakers and investors against overconfidence in the labor market's apparent stability.
While the U.S. economy added 147,000 jobs in June exceeding expectations, Eisenga emphasized that this number masks troubling undercurrents in the workforce. This report also is an interesting contrast to the ADP report which represents a more real time actual payroll database.
'On the surface, today's report looks encouraging,' said Eisenga. 'But dig deeper, and you'll find clear evidence of a cooling private-sector engine, sluggish hiring appetite, and shrinking workforce participation. We should be sounding the alarm, not celebrate.' This is especially the case when contrasting today's report with yesterday's ADP report, both can't be correct.
According to ADP Research, private sector payrolls fell by 33,000 in June, following a revised gain of only 29,000 in May. Additionally, service providers, which have driven much of the post-pandemic recovery, cut 66,000 jobs, particularly in professional services, and health care. Out of the 147,00 jobs created 73,000 of them were government related jobs. Small and mid-sized businesses are reducing headcounts, suggesting tight margins and increased caution in future hiring. According to ADP, average payroll growth has slowed dramatically to just 18,700 jobs for the past 3 months up to May. Challenger, Gray & Christmas reports that hiring plans in June were the second worst since 2004.
'Businesses are not panicking, but they are clearly becoming more cautious,' Eisenga said. 'Layoffs aren't skyrocketing, but employers are holding back on replacements and new hires. That tells you confidence is slipping.'
Labor force exits are also accelerating. The U.S. labor force shrank by 625,000 in May and another 130,000 in June, meaning between May and June, a combined 755,000 Americans exited the labor force, many likely due to retirement or more concerning exhausting their unemployment benefits. This mass exodus is not reflected in the drop in the unemployment rate to 4.1%, down from 4.2%. Accordingly, the unemployment rate did not drop because more people found jobs, but because fewer people are showing up on the stats due to the government's definition of dropping out of the workforce.
'A lower unemployment rate driven by workforce exits is not progress, it's smoke and mirrors,' Eisenga warned. 'We're seeing clear signs of job-hunting taking more time and a weakening path for consumer spending and growth.'
The number of people currently receiving unemployment benefits stands at 1.964,000, just shy of the 2-million mark. Hiring breadth is narrowing, and early regional employment data shows softening trends. Eisenga echoed recent calls from economists and Federal Reserve officials urging a pivot in Fed policy, including potential interest rate cuts as early as July. 'The Fed cannot afford to ignore these warning signs,' Eisenga said. 'The revisions and participation trends demand action. A proactive stance by the FED is long overdue.'
Eisenga concluded by urging business leaders, investors, and policymakers not to take headline numbers at face value:
'The real story is beneath the surface. If we wait for the next round of downward revisions to confirm what we already see forming, it will be too late.'
Media Contact:
Michael S. Eisenga, CEO
First American Properties
[email protected]
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