June jobs report: 288,000 jobs created, jobless rate drops to 6.1%
posted at 8:36 am on July 3, 2014 by Ed Morrissey
— BLS-Labor Statistics (@BLS_gov) July 3, 2014
Looks like the portents from ADP and Gallup were accurate. The BLS reports solid job growth in June of 288K, with the jobless rate decreasing to 6.1%. The number of jobs added in April and May were revised upward by 29,000 as well. However, the workforce participation rate remains at a 36-year low, while the number of involuntary part-time workers rose by 275,000:
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.
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. (See table A-1.) …
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. (See table A-1.)
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. The number of involuntary part-time workers is down over the year but has shown no clear trend in recent months. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)
ADP almost hit it right on the head yesterday with its estimate of 281,000. Private-sector employment rose by 262,000 in June. U-6, the more stable of the unemployment metrics, dropped a tenth of a point to 12.1%, its lowest level since the Great Recession and down from 12.7% in January. However, that’s still a long way off from the 8.2% of June 2007.
The number of people working part time for economic reasons rose as noted above, and now is at 7.544 million. A year ago, that seasonally-adjusted number was 8.194 million, and the trend has been going down during the recovery, if slowly. However, June’s number is still 287,000 higher than January.
CNBC notes the U-6 rate and tosses some cold water on the BLS’s preferred U-3 jobless rate:
A number of economists look past the “main” unemployment rate to a different figure the Bureau of Labor Statistics calls “U-6,” which it defines as “total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers.”
In other words, the unemployed, the underemployed and the discouraged—a rate that still remains high.
The U-6 rate fell slightly in June to 12.1 percent. While it is down 210 basis points over the last year, the trend has been somewhat more volatile than in the main unemployment rate, which steadily declined.
Reuters sticks with the top-line number for its headline, but on the live blog, wage stagnation catches their attention:
Average hourly earnings still aren’t rising by much. From the report: “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, averagehourly earnings have risen by 2.0 percent.”
Hourly earnings are important because Fed chair Janet Yellen has indicated she wants to see an increase before she really believes the employment situation is solid. Wage growth has been more or less stagnant since the end of the recession.
Binyamin Applebaum delivers the bottom line:
Bottom line: This labor market is much much weaker than the last time the unemployment rate stood at 6.1 percent.
— Binyamin Appelbaum (@BCAppelbaum) July 3, 2014
Indeed. And while the overall job growth is pretty decent, it’s still not high enough to make a dent in the ranks of the chronically unemployed from the last six years.
Update: Plus, there’s this:
For the 49th time in 50 months, more jobseekers gave up looking than found work. pic.twitter.com/szOWLIAsNO
— Ben Casselman (@bencasselman) July 3, 2014
Only one month in the past 4+ years has the number of jobs added exceeded the number of people leaving the workforce. Yikes.