July 6, 2018

June 2018 Employment Situation Summary (070618): 213,000 Jobs Added, Unemployment at 4.0 Percent; Workforce Increases by 601K

Filed under: Economy,Taxes & Government — Tom @ 8:00 am

Other data:

  • June’s ADP private-sector payroll additions came in at 177,000, slightly missing expectations of +190K.
  • As I’ve pointed out before, California’s total February through May job adds of about 38,000 (about 9.5K per month) have trailed the past seven years for the same four months by about 100,000 (or about 25K per month). If this continues, the state will hold the economy back from what it could be.
  • Car sales during June outperformed expectations, rising by “about 5 percent” from June 2017. The light trucks component of vehicles sales hit an all-time high 68 percent, which means that car-company revenue is rising faster than the percentage of unit sales increase.
  • The ISM in Manufacturing and Non-Manufacturing indices are at their highest combined-weighted level (59.3 percent) in a very long time.
  • May Construction Spending only increased by a seasonally adjusted 0.4 percent vs. much higher expectations, and April’s original 1.8 percent increase was revised down to 0.9 percent.

Predictions:

  • MarketWatch is carrying predictions of 200,000 additional payroll jobs and the unemployment rate staying at 3.8 percent.
  • Yahoo Finance — 195,000 jobs added, unemployment at 3.8 percent.
  • Bloomberg — 195,000 jobs added, unemployment at 3.8 percent.

Not seasonally adjusted benchmarks:

The databases weren’t accessible late Thursday evening, so this analysis will have to wait until after the June report’s release.

Other items to watch for are the usual: Wage increases; participation rates; full-time employment increases; growth in the the civilian labor force; and whether the black/African-American unemployment rate falls even further after last month’s steep decline, or heads back up a bit (which is what I expect).

The Employment Situation Summary report will be here at 8:30 (permanent link with tables will be here).

HERE IT IS: Looking strong, given that the unemployment rate going up should mean more people entering the labor force, but obviously need to look closer —

Total nonfarm payroll employment increased by 213,000 in June, and the unemployment rate rose to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job growth occurred in professional and business services, manufacturing, and health care, while retail trade lost jobs.

Household Survey Data

The unemployment rate rose by 0.2 percentage point to 4.0 percent in June, and the number of unemployed persons increased by 499,000 to 6.6 million. A year earlier, the jobless rate was 4.3 percent, and the number of unemployed persons was 7.0 million

Among the major worker groups, the unemployment rates for adult men (3.7 percent), adult women (3.7 percent), and Asians (3.2 percent) increased in June. The jobless rate for teenagers (12.6 percent), Whites (3.5 percent), Blacks (6.5 percent), and Hispanics (4.6 percent) showed little or no change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) increased by 289,000 in June to 1.5 million. These individuals accounted for 23.0 percent of the unemployed.

In June, the civilian labor force grew by 601,000. The labor force participation rate edged up by 0.2 percentage point over the month to 62.9 percent but has shown no clear trend thus far this year.

The employment-population ratio, at 60.4 percent, was unchanged in June and has essentially been flat since February.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in June at 4.7 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

Establishment Survey Data

Total nonfarm payroll employment increased by 213,000 in June and has grown by 2.4 million over the last 12 months. Over the month, job gains occurred in professional and business services, manufacturing, and health care, while employment in retail trade declined.

Employment in professional and business services increased by 50,000 in June and has risen by 521,000 over the year.

Manufacturing added 36,000 jobs in June. Durable goods manufacturing accounted for nearly all of the increase, including job gains in fabricated metal products (+7,000), computer and electronic products (+5,000), and primary metals (+3,000). Motor vehicles and parts also added jobs over the month (+12,000), after declining by 8,000 in May. Over the past year, manufacturing has added 285,000 jobs.

Employment in health care rose by 25,000 in June and has increased by 309,000 over the year. Hospitals added 11,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+14,000).

Construction employment continued to trend up in June (+13,000) and has increased by 282,000 over the year.

Mining employment continued on an upward trend in June (+5,000). The industry has added 95,000 jobs since a recent low point in October 2016, almost entirely in support activities for mining.

In June, retail trade lost 22,000 jobs, largely offsetting a gain in May (+25,000).

Employment showed little or no change over the month in other major industries, including wholesale trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in June. In manufacturing, the workweek edged up by 0.1 hour to 40.9 hours, and overtime edged up by 0.1 hour to 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours.

In June, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.98. Over the year, average hourly earnings have increased by 72 cents, or 2.7 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $22.62 in June.

The change in total nonfarm payroll employment for April was revised up from +159,000 to +175,000, and the change for May was revised up from +223,000 to +244,000. With these revisions, employment gains in April and May combined were 37,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 211,000 per month over the last 3 months.

So 250,000 more people were estimated to be working at payroll jobs in June than were in May.

More shortly … the BLS databases aren’t available right now, so it might be a while …

UPDATE: We’ll have to get to not seasonally adjusted numbers later. 9:45 a.m.: Much later — still not getting access.) Let’s look at other items which are easily reviewable (figures are seasonally adjusted unless otherwise indicated) —

  • The workforce participation rate finally ticked up a little to 62.9 percent, thanks to 601,000 people entering the workforce. Not in Labor Force dropped by 413,000. Household Survey employment grew by only 102,000.
  • The black unemployment rate rose to 6.5 percent, but that’s still lower than any pre-2017 rate. The Asian unemployment rate jumped to 3.2 percent from 2.1 percent, which just goes to show how volatile the seasonally adjusted numbers are for smaller population groups.
  • Full-time employment dropped by 99K; part-timers went up by 145K.
  • The so-called “U-6″ unemployment rate, supposedly the fully-loaded one (which doesn’t catch people who are on the sidelines) rose to 7.8 percent.
  • The key blue-collar job categories, which make up 13.9 percent of the total workforce (up from 12 percent a year ago), all increased (Mfg. by 36K, construction by 13K, and mining by 4K), and collectively (total of 53K) accounted for 25 percent of June’s 213K jobs increase — once again making them a disproportionate contributor to job growth. In the past 12 months, the goods-producing sectors have added 624K, or 26 percent, of the total of 2.374 million jobs added.
  • There was flatness in information (no jobs added), financial activities (8K), and wholesale trade (2.9K).
  • BLS’s wage increases are still just above 2-1/2 percent. That’s not in sync with some private data released in the past couple of months. If that discrepancy continues, we should start asking if BLS is under missing something.
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1 Comment

  1. [...] After eight years of a moribund economy under Obama, an eight year stretch that was particularly hard on minorities, it is indeed good to see an increasing number of people returning to the workforce.  So June’s jobs report from the BLS:  over 600,000 people returned to the workforce; 213,000 new jobs added; minority unemployment at record lows.  As always, for a complete analysis, visit Tom Blumer’s Bizzy Blog. [...]

    Pingback by Trumponomics - The BLS June Report - Bookworm Room — July 8, 2018 @ 11:54 am

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