June Jobs Report Bounces Back From Spring Doldrums

A good month for job growth in June.


After disappointing reports for April and May that suggested that the economy may be slowing, the July Jobs Report came back with impressive job gains, but it’s unclear if we’re looking at a trend or another blip on the radar:

Total nonfarm payroll employment increased by 287,000 in June, and the unemployment rate rose to 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Job growth occurred in leisure and hospitality, health care and social assistance, and financial activities. Employment also increased in information, mostly reflecting the return of workers from a strike.

The unemployment rate increased by 0.2 percentage point to 4.9 percent in June, and the number of unemployed persons increased by 347,000 to 7.8 million. These increases largely offset declines in May and brought both measures back in line with levels that had prevailed from August 2015 to April. (See table A-1.)


Total nonfarm payroll employment increased by 287,000 in June, after changing little in May (+11,000). In June, job growth occurred in leisure and hospitality, health care and social assistance, and financial activities. Employment also rose in information, largely reflecting the return of workers from a strike. (See table B-1.)

Leisure and hospitality added 59,000 jobs in June, following little employment change in the prior month. In June, employment increased in performing arts and spectator sports (+14,000), after edging down in May. Employment in food services and drinking places changed little over the month (+22,000). Job gains in leisure and hospitality have averaged 27,000 per month thus far this year, down from an average of 37,000 in 2015, reflecting slower job growth in food services and drinking places.

Health care and social assistance added 58,000 jobs in June. Health care employment increased by 39,000 over the month. Job gains occurred in ambulatory health care services (+19,000) and hospitals (+15,000), about in line with average monthly gains
over the prior 12 months in each industry. Within social assistance, child day care services added 15,000 jobs in June.

Employment in financial activities rose by 16,000 in June and has risen by 163,000 over the year.

Employment in information increased by 44,000 in June. Employment rose in telecommunications (+28,000), largely reflecting the return of workers from a strike. Employment increased in motion picture and sound recording industries (+11,000), after a decrease
of similar magnitude in May.

Employment in professional and business services continued to trend up in June (+38,000). Thus far this year, the industry has added an average of 30,000 jobs per month, compared with an average monthly gain of 52,000 in 2015.

Employment in retail trade edged up by 30,000 in June, after changing little over the prior 2 months. In June, job gains occurred in general merchandise stores (+9,000) and in health and personal care stores (+5,000). Retail trade has added 313,000 jobs
over the year.

Employment in mining continued to trend down in June (-6,000). Since reaching a peak in September 2014, mining has lost 211,000 jobs.

Employment in other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, and government, showed little or no change in June.

Offsetting this good news to some degree is the fact that jobs growth numbers for April and May, which were already weak, were revised net downward. April’s numbers actually went up, from +123,000 to +144,000, but that those gains were offset by the news that May’s already bad numbers were even worse than previously thought, with the +38,000 figure for that month being revised downward to +11,000, for a net two-month revision of -6,000. That puts the average jobs growth for the past three months at 147,333, a much stronger figure than we saw last month thanks largely to the strong number for June itself. . Since the beginning of the year, and including revisions through today’s report, the BLS has reported that some 1,029,000 new jobs have been created, for an average +171,500 net jobs created over the past six months. The fact that that the unemployment rate increased may be seen as bad news but the fact that it appears to have done so because more people entered the jobs market looking for work is typically taken as a good sign since it tends to signal that workers and potential workers think that the economy is improving enough for them to start looking for work again. Additionally, there is continued good news when it comes to wages, which advanced again last month although the average work week did not.

The New York Times trumpets the good news:

With the Republican and Democratic national conventions just weeks away, the government reported on Friday that employers added 287,000 workers in June, a vigorous rebound as the presidential nominees get ready to present their economic visions.

The official unemployment rate rose to 4.9 percent, from 4.7 percent. And average hourly earnings ticked up again, continuing a pattern set by three months of rising wages.

The welcome report on Friday showed the largest single monthly job gains since October 2015. The three-month average of monthly gains rose to 147,000.

“This report should ease any fears that a persistent slowdown or recession is coming soon in the U.S.,” said Dean Maki, chief economist at Point72 Asset Management. “The service sector is where the real strength is, with 256,000 hires, but the gains were widespread across sectors.”

The unexpectedly grim employment report in May had been disturbing enough to convince every voting member of the Federal Reserve’s policy-making committee last month to oppose any increase in its benchmark interest rate, as the official account of the meeting, released this week, revealed.

That jobs report, combined with Britain’s vote to leave the European Union, had fanned wider worries that the American economy was in danger of stalling.

Concerns about the vitality of the recovery — which is in its seventh year — persist, but economists pointed to several encouraging signs, like manufacturing and consumer spending data.

Every monthly jobs report provides only a fleeting and incomplete picture, and a strike by more than 35,000 Verizon workers artificially held down May’s totals; they were back on the job in June and counted once again.

“The slight uptick in unemployment is probably for good reasons, because more people rejoined the labor force,” Andrew Chamberlain, chief economist at Glassdoor Economic Research, said after the report was released on Friday.

More important, economists said that if the longer-term employment picture were significantly darkening, the stress would show up in other crucial areas. It is not. New claims for unemployment benefits have stayed at rock-bottom levels, consumer spending is strong, the manufacturing and service industry indexes have jumped, and the number of unfilled jobs, 5.8 million in April, is at a record since the survey began.

“During an economic downturn, the first place employers look to cut are unfilled jobs,” said Mr. Chamberlain, adding that he had seen little evidence that hiring was being scaled back. “When I look through all the data, there is no smoking gun that the U.S. economy is pulling into a recession now.”

Given that the jobless rate has consistently been at 5 percent or less since last fall, Mr. Chamberlain and other analysts argue it is time to lower the benchmarks for what is labeled a good or bad report.

“There’s no question that job growth is significantly slower today than it was one or two years ago,” he said, when the average monthly number routinely topped 200,000. “But that is to be expected at this point in the economic cycle.”

Taking account of the growing numbers of retiring baby boomers and the population growth, a monthly gain of 75,000 to 100,000 jobs is sufficient to keep the unemployment rate steady, while a 125,000 monthly gain is what is required to nudge it down further, Mr. Maki said before the report was released on Friday.

“I do think that whole framework will have to change over the next couple of years,” said Mr. Maki, who is also skeptical that the economy is in for a sustained slowdown.

But he acknowledged that the economy was in a transitional point, with job growth easing, which propels fears that it could quickly turn negative.

As things stand, this report is of course just one number among many and it’s entirely unclear if it’s any more indicative of where we’re headed in the future, that’s something that would have to wait for additional information over the coming months to find out. For the time being, it’s unlikely that this one report is going to have that much of an impact in the two areas where it matters the most, Federal Reserve policy and the election. With respect to the first, the last we heard from the Fed it announced that it was declining to raise rates yet again and that any future decision on interest rate hikes would depend on the state of the economy over the course of the next several months. This suggests that we’re unlikely to see anything significant until September at the earliest, and possibly not until the end of the year. At best, the economy overall seems to be chugging along at the same pace we’ve seen since 2009, which means positive growth but hardly the kind of robust positive growth that used to characterize past recoveries. Given that, it’s always been unclear why the Fed feels it necessary to be aggressive about raising rates from their historic lows when there is no real sign of inflation. Since that’s unlikely to change before the end of the year, it’s unclear why raising rates at this point should be a high priority issue.

On the political side, the impact of the economy on the election is likely to depend more on what the trends look like as we get closer to November than where they are now. Additionally, voters typically vote based less on what individual economic statistics say and more on how they feel about their personal economic situation and how they feel about the direction of the country. That being said, news like this is obviously generally good news for incumbents and bad news for those challenging the status quo. If it continues, then November could end up being rather anti-climactic not just at the Presidential level, but also at the Congressional and state levels.

FILED UNDER: Economics and Business, US Politics, , , , , , , , , , ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held 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 contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. C. Clavin says:

    it’s unclear if we’re looking at a trend or another blip on the radar

    76 straight months of private sector job growth…I’m sure it’s just a blip….

  2. Slugger says:

    There is too much focus on the monthly reports which inherently contain lots of statistical wiggles. The long term trend does look good. I am an economic agnostic and doubt that anyone really knows what’s going on. However, the data looks like things are generally stable, and the development of the US economy will continue on the same trend line as the past 200 years.

  3. Hal_10000 says:

    @C. Clavin:

    Because all trends continue indefinitely? I don’t think think it’s a blip but I also don’t think past results are guarantees of future performance.

  4. C. Clavin says:

    I didn’t say it was…but a trend is a trend.

  5. steve s says:

    @C. Clavin: If you look through doug’s archive, he almost always puts a negative spin on the jobs headline, regardless of the numbers.

  6. gVOR08 says:

    Predicting recession is like predicting rain, bound to be right eventually. The trick is when. Going this long without recession is highly unusual, and not likely to last. I normally wouldn’t be too worried about recession, it’s bound to happen some time. Right now two things do worry me. First, fighting recession is fairly easy and the tools are well known: cut interest rates and apply fiscal stimulus. The Fed has no room to cut rates and the GOPs will refuse to allow fiscal stimulus. Second, a recession could kick the election to the Republicans, always bad, disastrous with Trump. I think we’ve now dodged that bullet. Doug won’t be able to bitch about the next jobs report until October. And even if recession started today, it takes two quarters before it’s declared official.

  7. Ben Wolf says:

    I commented here at the time, May was likely to be an outier due to the Verizon strike and temporarily attenuated government spending flows. We’re now back to record levels of spending (up $105 billion over last year) and the deficit is expanding. That’s billions more becoming profits for businesses and paychecks for workers. It’s only a lousy 1.1% rate of growth but it’s enough to keep us out of recession.

  8. humanoid.panda says:

    @Hal_10000: Past results are not guarantees of future performance. But hiring activity is a good indicator of what employers think future conditions will be, and this reading indicates they feel a recession is not coming in the next few months. And, let’s be honest: we only care about the next few months right now, because Trump.

  9. Tyrell says:

    Just what are some of these jobs: hotel and food service (waitress, fast food), nursing home workers, jobs requiring cdl, school bus drivers, and vacuum cleaner door to door sales. That is what comes up on the job search around here. And there is that work from home internet job that promises “$88,000 a month” that pops up everywhere. Maybe we can try that out.

  10. rachel says:

    @Tyrell: Clearly these are worse than no job at all.

  11. steve s says:

    It’s almost like Tyrell is saying that hard work and determination and gumption aren’t enough to succeed in america, you need the right conditions provided by others…

  12. al-Ameda says:

    You know, the great recession of 2008-09 knocked me out of work for 6 months. I focused on financial management opportunities in the health care & health policy sector and eventually I landed a well-paying contract and grant financial management position.

    I agree that is HARD to land a good position when you’re over 50 and accustomed to a certain style of workplace, and now find that there is an intensely competitive work environment where the new chosen ones are 20 to 25 years younger. However, you have to bear down and compete – you have to work to make yourself employable, and show that you not only have the requisite skills, that you can fit in and add value to the new workplace. Where I work now I am surrounded by a large group of people a generation younger who are very smart and ambitious, and I find it very stimulating, and it has been given me plenty of additional incentive to compete, to show that I belong.

    There is no time to feel sorry for yourself, you’ve got to find a way to be relevant in this economy.

  13. mannning says:

    With the entitlements bill rising every year, the interest on the debt rising, and rising expenditures, several economists have predicted that, with no increase in taxes, entitlements plus interest on the national debt alone will absorb the entire revenue collected within a few years. James Dale Davidson, Andrew Weiss, Tom Bauman and Jim Rickards are among a number of economists and financial experts predicting this or similar contretemps for our economy. (In deference to the negative view of Porter Stansburry expressed here recently, I have left him off the list, but, he too expresses similar conclusions.) With the national debt well past $19 Trillion and growing, and out year commitments topping $200 Trillion, I see no reason for any optimism whatsoever. I have not seen a plan to fix our finances from the Administration or Congress that has a chance to pass: rather, more spending seems to be the direction, especially if Clinton is elected. It is madness.