Job Gains Rebound as Unemployment Ticks Up in June
The U.S. economy added an impressive 224,000 jobs in June, according to the Bureau of Labor Statistics, bouncing back from May’s weak report.
With that gain, the monthly positive gain streak continued to 105 consecutive months, and the monthly average for the first half of 2019 is about 172,000 jobs. The 12-month average for monthly job gain since June 2018 fell below 200,000 jobs per month once again at 191,750. Meanwhile, the unemployment rate edged up 10 basis points (bps) to 3.7%, as the civilian labor force continues to grow.
Average hourly earnings growth for all employees topped 3% for the 11th consecutive month in June, coming in at 3.1%, slightly below the 12-month average of 3.2%. The monthly gain between May and June was 0.2%, increasing $0.06 for the month. Annually, wages increased $0.85, to $27.90.
A little more than 2.3 million jobs were added in the 12 months ending June 2019 compared to about 2.5 million for the same period ending June 2018. This annual growth expanded the job base by 1.5%, below the average annual growth rate for the preceding 12 months (1.7%) and the lowest annual growth rate since January 2018. Revisions to the previous two months’ numbers resulted in 11,000 fewer jobs than initially reported as April’s job gain figure was revised from 224,000 jobs to 216,000 jobs, and May’s gains were revised from 75,000 to 72,000.
The civilian labor force participation rate increased to 62.9% from last month but was unchanged from last year. The employment-population ratio of 60.6% was the same for the fourth consecutive month but up 20 bps from June 2018. The total number of unemployed (5.98 million) is down about 562,000 from last year, making June the third straight month below 6.0 million unemployed.
The number of job leavers increased by 85,000 over May, to 888,000 and was up 87,000 from June 2018. Job leavers are workers who quit or voluntarily leave their previous job and immediately began looking for new employment. The number of part-time workers for economic reasons (4.35 million in June) fell by 389,000 from June 2018, and the number of part-time workers for non-economic reasons increased by 188,000 to 21.5 million as more workers are able to find jobs that suit them. The U6 unemployment rate, which includes part-timers for economic reasons and marginally attached workers, ticked up to 7.2% from May, but is down from 7.8% in June 2018.
The number of long-term unemployed workers out of work for 27 weeks or more was down 53,000 from June 2018 at 1.4 million, and the average duration of unemployment increased slightly to 22.2 weeks. The number of multiple jobholders increased by 530,000 year-over-year at 7.99 million. Meanwhile, the number of discouraged workers not in the workforce (425,000) increased by 66,000 from one year ago.
Only one industry suffered net losses in June’s seasonally adjusted job gains report, although a few performed poorly for the month. Strong monthly gains occurred in the Education and Health Services (+61,000), Professional and Business Services (+51,000), and Government (+33,000) industries.
• The health care and social assistance sector (+50,500) led monthly gains for the Education and Health Services industry’s job gains in June, with strong contributions from ambulatory health care services (+18,500) and hospitals (+11,200). Child day care services (+8,900) added the most jobs to social assistance’s monthly gain of 15,600 jobs. Educational services gained 11,400 jobs for the month.
• The Professional and Business Services industry gains in June were largely in the higher-paying professional and technical services (+29,900) sector, particularly the computer systems design (+7,200) and management and technical consulting services (+7,100) subsectors. Administrative and waste services added 16,200 jobs in June, led by services to buildings (+5,100) and temporary help services (+4,300).
• The Government sector’s 33,000 job gain for June was concentrated at the local level (+29,000), almost all of it excluding education (+26,400). Federal and state employment gained 2,000 jobs each for the month.
• The Construction industry had a solid month with 13,300 jobs added in specialty trade contractors, contributing the largest share to the industry’s 21,000 gain in June. The bulk of that was in nonresidential specialty trade contractors (+11,900). Construction of buildings added 6,100 jobs as well.
• The Trade, Transportation and Utilities supersector added 20,000 jobs in June, with the transportation and warehousing sector adding more than that (+23,900). Wholesale trade added only 100 jobs while retail trade lost 5,800 jobs for the month. Subsectors in retail trade were a mix of gains and losses with five subsectors adding jobs while seven subsectors lost jobs.
• The Manufacturing industry rebounded nicely, adding 17,000 jobs in June. Durable goods manufacturing (+12,000) showed renewed strength in computer and electronic products (+6,500) and machinery (+4,400), while nondurable goods (+5,000) saw gains in plastics and rubber products (+4,300) and miscellaneous nondurable goods (+2,600).
• The Other Services sector had a gain of 10,000 jobs in June with membership associations (+6,300) and repair and maintenance (+4,000) leading the way.
• The Leisure and Hospitality industry had a meager monthly gain of 8,000 jobs, entirely in the accommodation and food service (+9,300) sector as arts, entertainment and recreation lost 1,200 jobs last month. The volatile food services and drinking places subsector was almost flat with a mild loss of 300 jobs.
• The Financial Activities industry’s net gain of 2,000 jobs came primarily from the real estate subsector (+4,500) cancelling losses in credit intermediation (-2,000) and insurance carriers (-1,400).
• The Information industry (+2,000) gained jobs in the motion picture and sound recording (+3,100) and publishing industries (+1,200), but lost jobs in broadcasting (-1,000) and telecommunications (-500).
• The Mining and Logging industry (-1,000) had its sharpest cutback in support activities for mining (-2,600), but gained in oil and gas extraction (+1,400).