June ISM Manufacturing — 55.3%, virtually the same as May’s 55.4%.
Car Sales — Up just 1.2 percent year-over-year in June, which for some reason was celebrated in the press. The Big Six: GM, +1%; Ford, -6%; Chrysler, +9%; Toyota, +3%; Honda, -6%; Nissan, +5%.
- “Shipments of durable goods barely budged in April and May, factory orders fell in May, and May construction spending was flat.”
- “First-quarter productivity fell by an annualized 3.5 percent. If workers collectively produce less, it doesn’t matter how many of them there are. GDP will still decline. Additionally, Sentier Research reported this week that median household income in May 2014 ‘was ony 1.3 percent higher than in May 2013.’”
- “… consumer spending has cratered, declining in real terms in both April and May.”
Bloomberg — “In the U.S., Labor Department data at 8:30 a.m. in Washington will probably show employers added 215,000 workers in June and the jobless rate held at an almost six-year low of 6.3 percent, according to a Bloomberg News survey.”
Officially, expectations look fairly normal.
The consensus on Wall Street is for 215K new jobs, and for the Unemployment Rate to stay steady at 6.3%, with wages plodding along at 0.2%.
But some economists are expecting big things. SocGen, for example, thinks we’ll get 290K. Barclays sees 250K. Millan Mulraine of TD Securities said that the Wednesday ADP report offers the possibility of 300K or more new jobs for the month.
Hiring was likely robust for a fifth straight month in June, a sign that the economic recovery, now entering its sixth year, is finally gaining meaningful traction.
Economists have forecast that employers added 215,000 jobs last month, according to FactSet. That would be roughly in line with the 217,000 workers added in April. Average monthly job gains have averaged 213,600 this year.
Not seasonally adjusted data and benchmarks:
Here is the overall situation:
Business Insider’s point about a possible perceived seasonally adjusted “breakout” is well-taken. But it will only mark the beginnings of a genuine breakout if actual (i.e., not seasonally adjusted) additions are 600,000 or more. If that were to occur, it would probably translate to about 375,000 seasonally adjusted jobs. 500,000 actual jobs added would probably translate to about 300,000 seasonally adjusted jobs. The press and the administration would consider that a breakout. I wouldn’t.
Now let’s look at the private sector:
Actual (not seasonally adjusted) private-sector job additions need to be 1.05 million or more to truly be “breakout.”
The report will be here at 8:30 a.m.
HERE IT IS (full HTML permanent link): Well, they think they have their breakout; we’ll see if they really do shortly. But first, excerpts from the report —
Total nonfarm payroll employment increased by 288,000 in June, and the unemployment rate declined to 6.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains were widespread, led by employment growth in professional and business services, retail trade, food services and drinking places, and health care.
Household Survey Data
In June, the unemployment rate declined by 0.2 percentage point to 6.1 percent. The number of unemployed persons decreased by 325,000 to 9.5 million. Over the year, the unemployment rate and the number of unemployed persons have declined by 1.4 percentage points and 2.3 million, respectively.
Among the major worker groups, the unemployment rates for adult women (5.3 percent) and blacks (10.7 percent) declined in June, and the rate increased for teenagers (21.0 percent). The rates for adult men (5.7 percent), whites (5.3 percent), and Hispanics (7.8 percent) showed little change. The jobless rate for Asians was 5.1 percent (not seasonally adjusted), little changed from a year earlier.
In June, the civilian labor force participation rate was 62.8 percent for the third consecutive month. The employment-population ratio, at 59.0 percent, showed little change over the month but is up by 0.3 percentage point over the year.
… The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 275,000 in June to 7.5 million.
Establishment Survey Data
Total nonfarm payroll employment rose by 288,000 in June. Over the past 3 months, job growth has averaged 272,000 per month. In June, employment growth was widespread, led by gains in professional and business services, retail trade, food services and drinking places, and health care.
Employment in professional and business services rose by 67,000 in June and had averaged 53,000 per month over the prior 12 months. In June, employment within the industry increased in management and technical consulting services (+8,000), architectural and engineering services (+7,000), and computer systems design and related services (+7,000). Employment continued to trend up in temporary help services (+10,100, a number bigger than all others in this paragraph — it seems that the BLS wouldn’t tell us this because they’re embarrassed, and hopes no one looks up the real number — Ed.).
Retail trade employment increased by 40,000 in June. Over the prior 12 months, employment in this industry had grown by an average of 26,000 per month. In June, job growth in the industry occurred in motor vehicle and parts dealers (+12,000), building material and garden supply stores (+8,000), and electronics and appliance stores (+7,000).
Employment in food services and drinking places rose by 33,000 in June and has increased by 314,000 over the past year.
Health care employment increased by 21,000 in June, about in line with the prior 12-month average gain of 18,000 per month. Within health care, employment continued to trend up in ambulatory health care services (+13,000) and in nursing and residential care facilities (+6,000).
Transportation and warehousing employment increased by 17,000 in June. Over the prior 12 months, this industry had added an average of 11,000 jobs per month. In June, couriers and messengers added 6,000 jobs.
Financial activities added 17,000 jobs in June, with a gain of 9,000 in insurance carriers and related activities. Employment in real estate and rental and leasing continued to trend up in June (+9,000). Financial activities had added an average of 5,000 jobs per month over the prior 12 months.
Manufacturing added 16,000 jobs in June, with all of the increase in durable goods manufacturing. Within durable goods, employment increased in motor vehicles and parts (+6,000) and in computer and peripheral equipment (+3,000).
Wholesale trade added 15,000 jobs over the month and has added 140,000 jobs over the year.
… In June, the average workweek for all employees on private nonfarm payrolls was 34.5
hours for the fourth straight month. …
… In June, average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $24.45, following a 6-cent increase in May. Over the past 12 months, average hourly earnings have risen by 2.0 percent. In June, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $20.58.
The change in total nonfarm payroll employment for April was revised from +282,000 to +304,000, and the change for May was revised from +217,000 to +224,000. With these revisions, employment gains in April and May were 29,000 higher than previously reported.
Now let’s go to the acid test:
- Total nonfarm additions were 582,000 vs. the benchmark of 600,000.
- Total private sector additions were 978,000 vs. the benchmark of 1.05 million.
That’s about as close as actuals have ever come to yours truly’s benchmarks; you could argue that prior-month revisions put nonfarm payrolls over the top. If we’d see results like these for about six more consecutive months, we might really have something — IF the productivity issue I’m about to raise gets resolved.
This point from my column today bears repeating (bold is mine):
The anomaly which would seem to refute the idea that the economy may really be contracting is job growth, which, seasonally adjusted, has averaged about 214,000 per month so far this year and was predicted to come in at about the same level in June when this column was submitted. The problem is that job gains are not sufficiently translating into production or income growth.
First-quarter productivity fell by an annualized 3.5 percent. If workers collectively produce less, it doesn’t matter how many of them there are. GDP will still decline. Additionally, Sentier Research reported this week that median household income in May 2014 ”was ony 1.3 percent higher than in May 2013.”
Those who scoff at the notion that the economy could possibly not grow when about 800,000 jobs get added in a quarter need to explain how we got an annualized contraction of 2.9 percent in the first quarter when the economy added 575,000 seasonally adjusted jobs — and please, no horse manure about “the weather.”
It’s a little premature to theorize about the demoralization which has become the norm among those out of work spreading to those who have jobs — but just barely.
More later, after a dive into the detail.
Update, 9:20 a.m.: Noteworthy items (seasonally adjusted unless otherwise indicated):
- The civilian labor force barely increased (+81K), and is 128K below June 2013, even though the civilian population has increased by 2.3 million. (Aside: If June’s state detail is consistent with how May’s state detail came in, half or nearly half of that one-year workforce shrinkage has taken place in Ohio.)
- Naturally, based on the previous item, the “not in labor force” figure climbed to 92.12 million.
- The teenage labor force participation rate of 33.9 percent is a full point below June of last year. It went as low as 32.9 percent earlier this year.
- Call it a one-month anomaly if you want (my gut reaction is that it is, but we’ll have to see in future months), but the number of reported Household Survey part-time workers skyrocketed by 799K, while the number of full-timers fell by 523,000.
- Temp employment has increased by 216,000 in the past 12 months.
- Combine temp employment’s 216K in the past 12 months with food and drinking establishments’ 314K (total: 530K), and you have 21% of all payroll employment growth of 2.495 million during the past year coming from segments which until now made up about 9% of the workforce.