The Nation Continues to Record Solid Job Gains
The U.S. economy continues to add notably more jobs than economists predicted. Unemployment remains at historically low levels, while inflation remains high and interest rates continue to rise.
Roughly 372,000 employees were added to payrolls in June 2022, according to the Bureau of Labor Statistics (BLS). That was well above the roughly 250,000 additional positions forecasted by experts. Downward revisions to April and May combined showed 74,000 fewer jobs were added in those months than previously reported. Still, job additions in both months remained higher than economists had expected at the time. Despite recent gains, the nation’s total job count in June remained 524,000 jobs, or 0.3%, below the pre-pandemic level from February 2020. Meanwhile, the U.S. unemployment rate in June continued to hold steady at 3.6%. Unemployment has held steady since March 2022, at one of the lowest levels in over 50 years.
Jobs by Industry
The jobs recovery in June was focused in private service-providing industries which added 333,000 jobs, while the goods-producing industries added 48,000 for the month. Notable job gains occurred in Education and Health Services (+96,000), Professional and Business Services (+74,000), Trade, Transportation and Utilities (+68,000) and Leisure and Hospitality Services (+67,000). Meanwhile, the Government sector was down 9,000 jobs.
• The Education and Health Services industry’s monthly gain of 96,000 jobs was largely in the health care and social assistance sector (+77,800), with much of that gain in health care (+56,700). Health care employment was split between ambulatory health care services (+28,200), hospitals (+20,500) and nursing and residential care facilities (+8,000). Meanwhile, the educational services sector added 18,200 jobs in June. Total employment in Education and Health Services is 259,000 jobs, or 1.1%, lower than in February 2020.
• The Professional and Business Services industry gained 74,000 jobs in June with most of those in the professional and technical services sector (+42,000). The lower-paying administrative and waste services sector added 20,200 jobs, with the office administrative services subsector accounting for 7,900 of those jobs. As of June, Professional and Business Services had 880,000 more jobs than in February 2020.
• The Trade, Transportation and Utilities industry posted a net gain of 68,000 jobs in June with notable gains in transportation and warehousing (+35,500). Wholesale Trade added 16,400 jobs for the month with nondurable goods accounting for 8,300 positions. Retail Trade recorded a net gain of 15,400 jobs in June despite a loss of 7,200 jobs in general merchandise stores. Utilities was up just 1,000 jobs for the month. Overall employment in Trade, Transportation and Utilities is 914,000 jobs above the February 2020 level, led by strong growth in warehousing and storage (+503,000).
• Roughly 83% of the Leisure and Hospitality industry’s monthly gain of 67,000 jobs consisted of positions in the food services and drinking places (+40,800) and accommodation (+14,800) subsectors. The arts, entertainment and recreation sector added 12,100 jobs for the month, with 7,000 of those in the amusements, gambling and recreation subsector. Despite the recent job additions in Leisure and Hospitality Services, employment in this sector is still down by more than 1.3 million workers, or 7.8%, compared to the pre-pandemic level from February 2020.
• The Manufacturing industry’s gain of 29,000 jobs in June was fairly split between nondurable (+18,000) and durable (+11,000) goods. Among nondurable goods manufacturing, job gains were mainly in miscellaneous nondurable goods manufacturing (+5,400), plastics and rubber products (+5,300) and food manufacturing (+4,800). Job gains in durable goods were mainly in transportation equipment (+7,200). Employment in Manufacturing overall is now 12,000 jobs, or 0.1%, above the February 2020 level.
• The Information industry added 25,000 jobs in June, with the majority of those gains in the publishing industries, except Internet sector (+9,400). The motion picture and sound recording industries sector (+6,400) had a solid contribution as well. The Information industry is 105,000 jobs, or 3.6%, above February 2020 levels.
• The Construction industry added 13,000 jobs in June with a gain of 11,400 jobs in the nonresidential specialty trade contractors subsector. Notable job losses were seen in residential building (-4,500). Construction employment is up by 46,000 jobs, or 0.6%, compared to February 2020 levels.
• The Mining and Logging industry gained 6,000 jobs in June, with most of that net gain in Mining (+5,100). Logging gained just 800 jobs during the month. As of June, the Mining and Logging industry is 61,000 jobs, or 8.9%, below the February 2020 level.
• The Other Services sector added 2,000 jobs in June. The largest contribution to that total was from the personal and laundry services subsector, which added 5,600 jobs. Repair and maintenance added 2,500 jobs. The membership associations and organizations subsector was down 5,800 jobs for the month. The Other Services sector is 260,000 jobs, or 4.4%, below the February 2020 level.
• The Financial Activities industry added 1,000 jobs in June with gains in insurance carriers and related activities (+7,200) and real estate (+3,700) offset by losses in credit intermediation and related activities (-10,700). The Financial Activities industry overall is 81,000 jobs, or 0.9%, above February 2020 levels.
• The Government sector lost 9,000 jobs in June. Most of that net job loss was due to a decline in Federal Government jobs (-13,000). The State Government sector was down 1,000 jobs, with losses in state government, excluding education (-5,100) displacing gains in state government education (+4,000). Local Government added 5,000 jobs during the month. Overall, the Government sector is 664,000 jobs, or 2.9%, below the February 2020 level.
The unemployment rate (U3 or headline unemployment rate) in June remained at 3.6% for the fourth month in a row, just 10 basis points (bps) above the February 2020 showing, which was the lowest level in more than 50 years. At 3.5%, the February 2020 rate was the lowest level since 1969. The unemployment rate has not fallen below 3% since 1953.
As of June, the number of unemployed persons was essentially unchanged at roughly 5.9 million.
The unemployment rate for both adult men and adult women decreased 10 bps from May to 3.3% in June. On the other hand, the unemployment rate for teenagers rose 60 bps from May to 11% in June.
Across most major industries, unadjusted unemployment rates rose or were essentially unchanged from May to June. The biggest increase was in Government, up 140 bps to 3.1%. Education and Health Services also saw a notable increase in unemployment, with the rate climbing 80 bps to 3.3%. The unemployment rate in Professional and Business Services was up 30 bps from May to June, landing at 3.4%. On the other hand, the unemployment rate in Mining dramatically improved, falling 250 bps month-over-month to 1.6% in June. Other Services (2.5%) posted a 60-bps decline in the unemployment rate, while Transportation and Utilities (3.8%) recorded a 30-bps drop. All other major industries saw little to no change in unemployment rates from May to June.
The highest industry unemployment rates (not seasonally adjusted) in June were in Leisure and Hospitality Services (5.2%) and Wholesale and Retail Trade (4.1%). The lowest unemployment rates were in the Mining (1.6%) and Financial Activities (2.1%) sectors.
The number of unemployed persons that quit or voluntarily left their previous job to begin looking for new employment increased from 764,000 in May to 832,000 in June. The number of unemployed for 27 weeks or longer edged down, from 1.36 million in May to 1.34 million in June and accounted for 22.6% of all unemployed persons. The number of those working part-time that would prefer to work full-time declined by 707,000 from May to about 3.6 million in June, while the number of workers who prefer part-time positions decreased by 258,000 to around 20.2 million.
The U6 unemployment rate (seasonally adjusted), which includes part-timers for economic reasons and marginally attached workers, inched down to 6.7% in June compared to 7.1% the previous month and 9.8% a year earlier.
Labor Force Participation
The civilian labor force participation rate decreased 10 basis points (bps), moving from 62.3% in May 2022 to 62.2% in June 2022. That recent rate is still below pre-pandemic levels which averaged 63.1% in 2019. The employment-population ratio also decreased, falling from 60.1% in May to 59.9% in June.
Workers marginally attached to the labor force increased by about 32,000 from May to 1.5 million in June, while the number of discouraged workers stood at 364,000, down 51,000 month-over-month. Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months.
Average Hourly Earnings
Average hourly earnings among employees on private nonfarm payrolls rose $0.10 from May to June. That monthly increase took average hourly earnings to $32.08 in June, the 10th consecutive month above $31. On an annual basis, average hourly earnings were up $1.56, a 5.1% increase year-over-year. However, wages were outstripped by inflation, as the Consumer Price Index (CPI) rose 8.6% in the year-ending May.
Industry wage growth varied greatly. Leisure and Hospitality Services average hourly wages jumped 9.1% year-over-year in June, as competition for restaurant and other service workers has had a dramatic effect on wage growth. Utilities and Education and Health Services workers both enjoyed a 6.1% annual increase in hourly wages. Professional and Business Services employees posted a 5.8% year-over-year increase and Construction workers saw an upturn of 5.6%. Most other industries averaged increases of 4% to 5%. The smallest annual increases in hourly wages were seen among Financial Activities (2.4%) and Other Services (2.9%) employees.
The percentage of workers that telework continued to fall in June as more and more companies are welcoming workers back into the office. June’s teleworking rate of 7.1% was below the 7.4% rate recorded in May 2022 and well below the 35.4% rate recorded in May 2020, according to the BLS’s supplemental data measuring the effects of the coronavirus pandemic on the labor market. The metric does not include employees who worked from home prior to the pandemic. The rate of teleworking will likely continue to remain elevated compared to historical norms as employers discover that remote working can act as a hiring and retention inducement that boosts employee morale while productivity remains close to previous levels.