June Jobs Report Shows Economy Still in the Dumps
In yet another disappointing report, the Bureau of Labor Statistics announced Friday morning that, seasonally adjusted, the economy created just 84,000 new private jobs in June, less than half of what a private survey by ADP reported Thursday, and below the consensus of experts surveyed ahead of time. Government layoffs subtracted 4,000 jobs from the total. The official "headline" unemployment rate remained at 8.2 percent.
An alternative measure, which counts part-time workers who want full-time jobs (but can't find any), and some of the millions of people who have become too discouraged to look for work, rose from 14.8 percent to 14.9 percent.
Mediocre is the most generous assessment that can be made, and Republicans can be expected to hammer on the results even though they have worked assiduously to block every effort to improve matters since President Obama arrived in the Oval Office.
The number of Americans unemployed for six months or more remained at 5.4 million. Revisions changed growth in payroll employment in April from 77,000 to 68,000 and in May from 69,000 to 77,000. Three years after the official end of the Great Recession, 12.7 million Americans are officially out of work.
For the eight months just ended, the average monthly job growth has been 160,250. But for the first four months of that period, the monthly average was 229,000; for the four months just completed, however, the monthly average fell to 92,000. That's an ominous trend. Even at the higher average growth of those earlier four months ending in February, it would take until 2019 to absorb population growth and return to the job growth level we had in December 2007.
The civilian labor force participation held steady at a very low 63.8 percent; the employment-population ratio also was unchanged at 58.6 percent.
The BLS jobs report is the product of a pair of surveys, one of business establishments and the Current Population Survey of 60,000 households. The establishment survey determines how many new jobs were added, calculated on a seasonally adjusted basis. The CPS provides data that determine the official "headline" unemployment rate, also known as U3. That's the number now at 8.2 percent.
The CPS report for June showed 156,000 additional workers joined the civilian labor force; there are 128,000 more workers employed now than in May. That number is more volatile month-to-month than the number from the business establishment survey.
Overall nearly 24 million Americans are now counted as jobless or underemployed. But if millions of Americans had not been leaving the labor force in such large numbers, those statistics and the unemployment rate would look a good deal worse than they do, with perhaps 29 million out of work entirely or underemployed. If we now had a labor force participation rate closer to its higher historical average and job-seeking drop-outs had stayed in the labor force, the unemployment rate right now would be as high as 11.1 percent, instead of that 8.2 percent we'll be hearing about all day.
Here's what the job growth numbers have looked like for June in the most recent six years:
June 2007: +75,000
June 2008: -198,000
June 2009: -482,000
June 2010: -167,000 (worsened by Census layoffs)
June 2011: +84,000
June 2012: +80,000
Among other changes detailed in today's job report:
• Construction: +2,000
• Health care: +13,000
• Manufacturing: +11,000
• Professional and business services: +47,000
• Retail: -5,400
• The average workweek (for production and non-supervisory workers) rose from 34.4 to 34.5 hours.
• Average manufacturing hours rose to 40.7 hours
• The average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $23.50. Over the past year such earnings have risen 2.0 percent, compared with an inflation rate now running at 2.7 percent. In other words, workers' real wages are falling.