The June jobs report beat expectations, and for the second month in a row outpaced the usually-inflated ADP employment survey. The US economy added 195,000 jobs over, and added 202,000 in the private sector. The U-3 jobless rate remained steady at 7.6%:
Total nonfarm payroll employment increased by 195,000 in June, and the unemployment rate was unchanged at 7.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in leisure and hospitality, professional and business services, retail trade, health care, and financial activities.
Household Survey Data
The number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6 percent, were unchanged in June. Both measures have shown little change since February. (See table A-1.)
The overall results for June roughly coincided with the ADP results (+188K in the private sector), and came in above expectations. Not all of the indicators are good in this result, however. The number of people in the involuntary part-time category rose 322,000 this month, outstripping the overall gains in full-time employment. Year-on-year, the number of discouraged workers has risen by 206,000 people as well (see update).
Even worse, the U-6 rate jumped significantly from last month, going from 13.8% to 14.3%:
Wow, the U-6 rate (unemployed, discouraged, underemployed) surges to 14.3% from 13.8%
— James Pethokoukis (@JimPethokoukis) July 5, 2013
That’s the highest rate for the U-6 since February, and it belies the growth that the topline measures suggest. However, bith the civilian labor force participation rate and the employment population ratio improved by a tenth of a point in June (63.5% and 58.7% respectively), although both are still near generational lows.
The BLS also upwardly revised the previous two months by 70,000 total:
More: Labor Department says the US economy added 70,000 more jobs in May and April than initially reported – @AP
— Breaking News (@BreakingNews) July 5, 2013
CNBC manages not to get too far ahead of itself in reporting the upside:
The numbers provided a mixed bag of news: While the actual employment level grew by 160,000, the unemployment ranks increased as well, by 17,000.
Those working part-time for economic reasons also jumped, growing [322,000] for the month.
That pushed a more encompassing count of unemployment that includes discouraged and underemployed from 13.8 percent to 14.3 percent.
Moreover, the quality of jobs was weak.
The bulk of the gains—75,000—came in the hospitality industry of bartending and waiters.
Professional and business services was the second-best growth area, adding 53,000 and retail grew 37,000.
Even if the jobs weren’t “weak,” it’s still a stagnation result. The American economy needs to add 150,000 jobs a month just to keep up with population growth. At this pace, it would almost 5 months just to make up for the 206K who joined the discouraged-worker ranks over just the past year. It would take more than seven months just to make up for the number of people who moved into the involuntary part-time ranks this month alone.
We’re still mired in the Great Stagnation, and will be until we start getting consistent job-creation reports at the 300K level.
Update: I misread the portion about the discouraged workers; there are 1 million overall, an increase of 206,000 from last year, not an increase of a million. I’ve fixed the post in two places above. Thanks to Dustin Siggins for the correction.
Update: A good question from Twitter:
@JimPethokoukis Is it possible, Jim, that the U6 jump reflects people returning to the workforce? Only explanation I can think of for 14.3
— West Wing Reports (@WestWingReport) July 5, 2013
The workforce level did increase by 180K in June. That’s not enough to drive the 0.5% increase in U-6, though, and that increase was much less than the 320K increase from April to May. The U-6 level in that month actually dropped a tenth of a point from 13.9% to 13.8%.