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A Solid June Jobs Report Signals Bounce Back From Slump In May

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The jobs market appears to have bounced back from a mediocre May with a solid number for June, as well as significant upward revisions for the preceding two months that indicate the employment picture was brighter than it initially appeared to be:

Total nonfarm payroll employment increased by 222,000 in June, and the unemployment rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care, social assistance, financial activities, and mining.

In June, the unemployment rate, at 4.4 percent, and the number of unemployed persons, at 7.0 million, were little changed. Since January, the unemployment rate and the number of unemployed are down by 0.4 percentage point and 658,000, respectively. (See table A-1.)

Among the major worker groups, the unemployment rates for adult men (4.0 percent), adult women (4.0 percent), teenagers (13.3 percent), Whites (3.8 percent), Blacks (7.1 percent), Asians (3.6 percent), and Hispanics (4.8 percent) showed little or
no change in June. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more) was unchanged at 1.7 million in June and accounted for 24.3 percent of the unemployed. Over the year, the number of long-term unemployed was down by 322,000. (See table A-12.)

The labor force participation rate, at 62.8 percent, changed little in June and has shown no clear trend over the past year. The employment-population ratio (60.1 percent) was also little changed in June and has held fairly steady thus far this year. (See
table A-1.)

(…)

Total nonfarm payroll employment increased by 222,000 in June. Employment rose in health care, social assistance, financial activities, and mining. Employment growth has averaged 180,000 per month thus far this year, in line with the average monthly gain of 187,000 in 2016. (See table B-1.)

In June, health care added 37,000 jobs. Employment increased in ambulatory health care services (+26,000) and hospitals (+12,000). Health care has added an average of 24,000 jobs per month in the first half of 2017, compared with a monthly average of 32,000 jobs in 2016.

Social assistance employment increased by 23,000 in June. Within the industry, employment continued to trend up in individual and family services (+12,000) and in child day care services (+8,000). Social assistance has added 115,000 jobs over the last 12 months.

Employment in financial activities rose by 17,000 in June and has grown by 169,000 over the year. Securities, commodity contracts, and investments added 5,000 jobs over the month.

In June, mining employment grew by 8,000, with most of the growth in support activities for mining (+7,000). Since a recent employment low in October 2016, mining has added 56,000 jobs.

Employment in professional and business services continued to trend up in June (+35,000) and has grown by 624,000 over the last 12 months.

Employment in food services and drinking places also continued on an upward trend in June (+29,000). The industry has added 277,000 jobs over the year.

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government, showed little change over the month.

The Bureau of Labor Statistics also reported that the net jobs number for April was revised upward from +174,000 to +207,000 and that the number for May was revised upward from +138,000 to +152,000, for a total net upward revision for those two months of +47,000. This puts average net jobs creation for the past three months of +193,667(rounded). This is well above where it was last month due both to the strength of this month’s relatively good numbers and the upward revisions noted above. For the year to date, the economy has added +1,079,000 new jobs meaning that the average job creation number for the year to date stands at  179,834(rounded). This is also a higher average than what we saw last month, and more in line with the numbers that we’ve seen over the past several years. By way of comparison, average jobs growth for 2016 was +176,166(rounded) by the time the final revisions for that year were released in March of this year.

Looking deeper in the report, the increase in the top-line jobs report appears to be due to both an increase in the number of unemployed persons and an increase in those looking for work. The second factor, of course, is generally seen as good news since it’s seen as a sign that job seekers are looking for work again because they believe that a job search will be worthwhile. The long-term unemployment remained largely unchanged for the month, though, as did the labor force participation and the employment participation ratio. None of these numbers have changed significantly so far this year in any direction, though, suggesting that we may be seeing them at these levels for some time to come.  Meanwhile, there was little change in the average work week while average hourly earnings once again increased by 4 cents per hour. This suggests that the jobs market remains fairly tight despite the more positive numbers and that employers do not feel any particular pressure to increase either wages or the work week in order to prevent workers from looking elsewhere for employment.

Given the disappointing numbers that we saw over the past two months, as well as a disappointing 1.4% growth rate in Gross Domestic Product for the first three months of the year, these numbers are relatively good news and, perhaps, a sign that employers are anticipating better economic growth for the balance of the year. It seems unlikely, though, that it will be the kind of explosion in growth that Trump supporters and the Administration have been hoping for. For one thing, we are late in an economic recovery that began in the summer of 2009, putting the current recovery right up there with the one in the Reagan and Clinton eras as one of the longest periods of positive economic growth since the end of World War Two. Typically, this stage of a recovery is marked by stability in the growth rate rather than an explosion beyond the average of roughly 2.5% that we’ve seen over the past eight years. Second, the fact that the Federal Reserve has embarked on a path that will include increases in interest rates, albeit rather small increases, every three months or so, means that growth will be held back at least to some extent. Finally, there simply isn’t anything in the current economic picture that points to an explosion in growth anytime in the near future.

The Trump Administration will, no doubt, tout today’s numbers as a sign that the President is having a positive impact on the economy. This is a response you’d expect from any sitting President, of course, but there’s really nothing to it at this point. Outside of signing into law a handful of Congressional resolutions that undid some regulations adopted under the Obama Administration, the Trump Administration really hasn’t done anything that would have a significant impact on the economy in either a positive or negative way. The President’s tax plan is nothing more than a set of bullet points that haven’t even been put into legislative form yet, never mind formally proposed or voted on by Congress. That grand infrastructure plan he talked about during the campaign, and which he’s mentioned several times since becoming President, remains nothing but vaporware at the moment. And, nothing else that the Administration has done can fairly be said to have had much of an impact on either economic growth or the hiring decisions that employers make. Even if there had been anything like that enacted, though, the fact remains that the current economic situation is largely unchanged from where it was the last several years of Barack Obama’s Presidency, so there’s not really much for Trump to brag about right now.

 

 

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Scott says:

    The Trump Administration will, no doubt, tout today’s numbers as a sign that the President is having a positive impact on the economy. This is a response you’d expect from any sitting President, of course, but there’s really nothing to it at this point.

    Besides, I thought the Bureau of Labor Statistics was corrupt and all the numbers are made up. Has that changed with the new administration?

    Like or Dislike: Thumb up 6 Thumb down 0

  2. SenyorDave says:

    @Scott: The statistics are only made up when a person of color is POTUS.

    Like or Dislike: Thumb up 5 Thumb down 2

  3. MBunge says:

    Not to be a complainer, but what is the point if all you have to add is “TRUMP DOESN’T GET ANY CREDIT FOR THIS!!!!!” It’s not like a politician and his supporters claiming credit they don’t deserve is some bizarre norm-breaking against which we must guard.

    Mike

    Like or Dislike: Thumb up 1 Thumb down 6

  4. MarkedMan says:

    Credit? Basically, things have continued along Obama’s trajectory. Trump’s plan to rev the economy up to 4% growth? Well, those are just Republican promises. Not real promises.

    Like or Dislike: Thumb up 2 Thumb down 1

  5. MarkedMan says:

    Every month Kevin Drum puts out a chart showing the “net new job growth” which is basically the new jobs number minus the amount needed to keep up with working population growth. If you check out the link you will see that that Trump’s numbers are basically the same as the previous trajectory, with job growth decreasing as unemployment drops. So far, the Republi-magic has done nothing to increase or decrease job growth.

    Like or Dislike: Thumb up 6 Thumb down 0

  6. Gustopher says:

    Do these reports have a breakdown by rural vs. urban counties?

    Here in Seattle, with our $15 minimum wage, things are booming — the labor market is so tight that employers have to resort to offering more than $15/hr for a lot of unskilled labor. But, Eastern Washington remains a stagnant swamp of no opportunity.

    Like or Dislike: Thumb up 6 Thumb down 1

  7. Daryl's other brother Darryl says:

    @MBunge:
    @MarkedMan:
    The Orange Snowflake promised 25M jobs in his inauguration speech.
    Assuming an 8 year term that’s 260,416 jobs each and every single month for 96 months.
    So let’s just go ahead and add that to the list of things MBunge’s dear leader will not, and cannot, deliver on.

    Like or Dislike: Thumb up 5 Thumb down 0

  8. SenyorDave says:

    @Gustopher: I’ve used this before for my job. Numbers fluctuate a lot due to the size of sample, but they are a good guide. Need to poke around a little to find things, but some pretty granular data is available.

    Like or Dislike: Thumb up 0 Thumb down 0

  9. CSK says:

    Sorry to go OT, but Trump’s latest Twitter explosion may be his most bizarre yet. He Tweeted this morning that everyone–yes, everyone–at the G20 is talking about how John Podesta refused to turn over the DNC server to the FBI an the CIA.

    Somebody, quick, grab a giant butterfly net and use the damn thing. Now.

    Like or Dislike: Thumb up 5 Thumb down 3

  10. Daryl's other brother Darryl says:

    Has anyone seen the smack-down John Podesta gave the Orange Snowflake today?
    People taking this tone with Snowflake cannot happen enough.
    Dumb Don is such an idiot, it defies belief.
    The fact that almost 40% of the people in this country still support this clown makes me worry for the future of the Republic.

    Like or Dislike: Thumb up 7 Thumb down 1

  11. SenyorDave says:

    @SenyorDave: https://www.bls.gov/lau/lauov.htm

    Forgot the link

    Like or Dislike: Thumb up 0 Thumb down 0

  12. Daryl's other brother Darryl says:
  13. MarkedMan says:

    Another good chart from Drum

    . This one shows that after the great recession job growth rose steadily until the first half of 2015 and then slowed steadily. The first half of 2017 fit right in with this trend.

    Like or Dislike: Thumb up 1 Thumb down 0

  14. al-Alameda says:

    @MBunge:

    Not to be a complainer, but what is the point if all you have to add is “TRUMP DOESN’T GET ANY CREDIT FOR THIS!!!!!” It’s not like a politician and his supporters claiming credit they don’t deserve is some bizarre norm-breaking against which we must guard.
    Mike

    Well, for 8 years conservatives claimed that the steady jobs growth in the aftermath of the 2008-09 crash had nothing to do with Obama, and if it did it was anemic. Never mind that the unemployment rate steadily dropped from 10% to under 5%.

    So, while I agree with you that presidents usually get the credit or the blame for economic performance (whether it’s warranted or not).

    That said, I’d like to give conservatives credit for breaking all the norms during the Obama years.

    Like or Dislike: Thumb up 6 Thumb down 1

  15. Kylopod says:

    @MBunge:

    Not to be a complainer, but what is the point if all you have to add is “TRUMP DOESN’T GET ANY CREDIT FOR THIS!!!!!” It’s not like a politician and his supporters claiming credit they don’t deserve is some bizarre norm-breaking against which we must guard.

    Ok, let’s review what Doug actually said:

    The Trump Administration will, no doubt, tout today’s numbers as a sign that the President is having a positive impact on the economy. This is a response you’d expect from any sitting President, of course, but there’s really nothing to it at this point. (emphasis added)

    So, in sum, in response to a piece in which Doug states that it’s completely normal for a president to tout a positive jobs report even if they played little role in it, you complain that it’s completely normal for a president to tout a positive jobs report even if they played little role in it.

    In other words, like usual, you’re attacking a strawman. And also like usual, you won’t apologize for having been caught making a disingenuous argument, you’ll ignore all the rebuttals, and in another day or so you’ll be popping into another thread with another snark-filled self-righteous post about how we’re all clueless sheep and you’re the only one who gets it, despite your curious inability to actually defend your views against any of our supposedly pathetic arguments.

    Your behavior here has become so predictable you should patent it.

    Like or Dislike: Thumb up 6 Thumb down 0

  16. DrDaveT says:

    The jobs market appears to have bounced back from a mediocre May with a solid number for June, as well as significant upward revisions for the preceding two months that indicate the employment picture was brighter than it initially appeared to be that initial monthly jobs reports are more noise than signal, and should be treated as such.

    Seriously, Doug. Every month.

    Unless you’re going to plot the long-term trends of the (revised) numbers, you’re doing the equivalent of getting all excited about who is leading the National League Central halfway through May.

    Like or Dislike: Thumb up 1 Thumb down 2

  17. Matt says:

    @Daryl’s other brother Darryl: So the word is OMG PODESTA MELTED DOWN AND HE:S GOING TO BE ARRESTED GET A LAWYER!!!

    Man some of those people are completely disconnected from reality.

    Then there’s the absolute ignorant stupidity that was Trump’s tweets about the DNC server. That fellow is either dumb as hell or intentionally being stupid.

    Like or Dislike: Thumb up 4 Thumb down 1

  18. CSK says:

    @Matt:

    Trump also informed the president of Mexico today that Mexico would be paying for the wall.

    Like or Dislike: Thumb up 5 Thumb down 0

  19. Guarneri says:

    So how are you children doing today. BTW – how’s that collusion thingy working out for ya? I hear Loretta Lynch isn’t sleeping too well recently, but for different reasons. The poor dear.

    Like or Dislike: Thumb up 0 Thumb down 5

  20. Hal_10000 says:

    @Daryl’s other brother Darryl:

    Yeah, he had a point. OTOH, this whole thing started when he fell for a phishing e-mail.

    Like or Dislike: Thumb up 0 Thumb down 2

  21. CSK says:

    For his speech in Poland, Donald Trump is being compared to Pericles.

    Yeah, I know.

    Like or Dislike: Thumb up 1 Thumb down 0

  22. al-Ameda says:

    @CSK:

    For his speech in Poland, Donald Trump is being compared to Pericles.

    I’m pretty sure he was being compared to Peritonitis.

    Like or Dislike: Thumb up 2 Thumb down 0

  23. CSK says:

    @al-Ameda:

    The very fact that someone would actually compare Trump to Pericles shows how impossible it is to reach a true believer. Of course most ardent Trumpkins wouldn’t know Pericles from popsicles.

    Like or Dislike: Thumb up 4 Thumb down 0

  24. Terrye Cravens says:

    I don’t think a month tells us much..especially considering the fact that initial numbers are often revised. We shall wait and see what happens.

    Like or Dislike: Thumb up 1 Thumb down 0

  25. michilines says:

    For commenters obsessed with telling us all what is readily available on memeorandum, they may want to look at the many layers to the death of a U of A student.

    Can we all agree that we all pay attention to memeorandum and drop with the pretense that someone is breaking news in the comment section of this blog.by adding something on that site? It’s so very irritating, especially when it always has a self-congratulating air to it.

    “First” is so last century.

    Like or Dislike: Thumb up 0 Thumb down 1