June Employment Numbers Roar Back
After stumbling in May, June employment numbers came back strongly in June, as employers added nearly 300,000 jobs.
The Bureau of Labor Statistics on Friday reported total nonfarm payroll employment increased by 287,000 in June, up sharply from just 11,000 in May (revised) and 144,000 in April (revised). Over the past three months, job gains averaged 147,000 per month.
The unemployment rate ticked up in June, to 4.9 percent from 4.7 percent in May; the number of unemployed persons increased by 347,000 to 7.8 million. But John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C., said the uptick wasn’t necessarily a bad thing.
“Growth among full-time workers is once again clearly outpacing the rise in part-time employment, consistent with a reduction in labor market slack beyond the headline unemployment rate,” Silvia said.
BLS reported a slight uptick in the labor force participation rate, to 62.7 percent. The employment-population ratio, at 59.6 percent, changed little in June. The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) decreased by 587,000 to 5.8 million in June, offsetting an increase in May. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.
BLS reported the average workweek for all employees on private nonfarm payrolls in June held steady at 34.4 hours for the fifth consecutive month. The manufacturing workweek (40.7 hours) and manufacturing overtime (3.3 hours) were also unchanged. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.
Average hourly earnings for all employees on private nonfarm payrolls edged up (+2 cents) to $25.61 in June, following a 6-cent increase in May. Over the year, average hourly earnings have risen by 2.6 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.51 in June.
“Job gains have remained remarkably steady in the service sector at 2 percent, which may reflect the relative strength for the domestic consumer market,” Silvia said. “Service sector job gains have been broad-based with particular strength in business services, education and health as well as leisure and hospitality sectors. In contrast, job growth in both manufacturing and construction has clearly slowed.”
Silvia added that the continued rise in payrolls along with the very modest rise in average hourly earnings will keep Federal Open Market Committee policy “tilted toward another fed funds rate increase this year, but we believe it is unlikely to come before the election.”
