Jobs Report Posts Solid June Gains
Total nonfarm payroll employment increased by 222,000 in June, better than expected, while the unemployment rate ticked up slightly to 4.4 percent, the Bureau of Labor Statistics reported Friday.
Additionally, BLS revised upwards its totals from April and May. It revised employment for April up from 174,000 to 207,000 and May from 138,000 to 152,000. With these
revisions, employment gains in April and May combined were 47,000 more than previously reported. Over the past three months, job gains have averaged 194,000 per month.
Since January, the unemployment rate and the number of unemployed are down by 0.4 percentage point and 658,000, respectively. The report said the labor force participation rate, at 62.8 percent, changed little in June and has shown no clear trend over the past year. The employment-population ratio (60.1 percent) was also little changed in June and has held fairly steady thus far this year.
John Silvia, chief economist with Wells Fargo Securities, Charlotte, N.C., said the June job gains and a rise in wages indicate continued economic growth ahead and a basis for the Fed to continue its current policy path.
“Long-term unemployment remains higher than levels of the past 30-plus years, signaling a structural shift in the labor market,” Silvia said.
Mark Fleming, chief economist with First American Financial Corp., Santa Ana, Calif., said while the job growth is good for the overall economy, questions remain whether the shortage in residential construction workers could exacerbate inventory issues in housing.
“Specifically for the housing market, residential construction employment, which is a non-substitutable input necessary to increase the pace of housing starts and increase the housing stock, is an important metric to monitor,” Fleming said. “Building a home does not readily lend itself to outsourcing and automation. Home building still requires manual labor as a key input into the production process. This month’s decline by 1,500 jobs, compared with May is becoming a significant impediment to more housing starts. It’s very hard to have an increase in housing starts without an increase in residential construction employment.”
BLS reported the average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.5 hours in June. In manufacturing, the workweek edged up by 0.1 hour to 40.8 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls rose by 0.1 hour to 33.7 hours.
The report said average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.25. Over the year, average hourly earnings have risen by 63 cents, or 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $22.03.
