- Total non-farm payroll employment increased by 224,000 and the unemployment rate rose to 3.7 percent, according to the Bureau of Labor Statistics.
- The Labor Force Participation (LFP) rate remained at 62.9 percent the same rate from one year ago. The Employment-Population ratio also remained at 60.6 percent.
- Professional and Business Services (+51,000) and Health Care (+35,000) led all sectors in May. Construction added 21,000 jobs. Manufacturing added 17,000 jobs.
- Employment in other industries did not change from May to June. Mining, Wholesale Trade, Retail Trade, Information, Financial Activities, Leisure and Hospitality and Government changed little.
- Average hourly earnings rose by 6 cents to $27.90. Since June 2018 wages are up 3.1 percent.
- In June, the average workweek for all employees remained at 34.4 hours.
- The number of persons employed part-time was unchanged in June (4.3 million). The number of long-termed unemployed (greater than 27 weeks) remained unchanged at 1.4 million and accounted for 23.7 percent of all unemployed.
- In June 1.6 million persons were not in the workforce but wanted and were available for work and sought employment in the last year. This group known as “workers marginally attached to the labor force” was unchanged since last year. BLS reports that 1.1 million of this group had not searched for work “for reasons such as school attendance or family responsibilities.”
- Revisions to the two previous months counted 11,000 less jobs than reported initially. April 2019 was revised from 224,000 to 216,000 while May 2019 was revised from 75,000 to 72,000.
ANALYSIS
After a weak May payrolls report (+72,000) the U.S. jobs machine roared back with 224,000 new jobs in June.
Professional and Business Services, Health Care and Transportation and Warehousing sectors lead June’s growth.
Overall, the jobs machine is clearly slowing down. Employment growth, according to the BLS, has averaged 172,000 this calendar year compared with an average of 223,000 in 2018.
However, today’s BLS report shattered expectations; Wall Street expected a gain of 160,000 new jobs. While slower than one year ago, the private sector culled 191,000 new jobs. The parallel measure, the ADP National Employment Report, earlier this week projected a gain of 106,000 private jobs.
With the BLS revisions, the three-month average for U.S. job growth rang in at 171,000.
Despite uncertainty about international trade, the U.S. Manufacturing sector is holding its own. The Manufacturing sector added 17,000 jobs in June; while little changed over the past four months, manufacturing is growing albeit slowly. Thus far the sector has averaged 8,000 per month, compared with 22,000 last year.
The trade-tariff impasse is not diminishing growth in the sector. While the manufacturing sector employs approximately 120,000 less workers than it did before the Great Recession, average hourly wages are rising steadily. (See Figure A.)
Unemployment in the manufacturing sector declined from June 2018 to June 2019, from 3.1 percent to 2.8 percent. For most part, manufacturing attracts workers on the lower end of educational attainment, but wages are good entry point to the middle class. These workers have also fared well overall in the economy. Unemployment for those with less than a high school degree was 5.8 percent in May. Workers with a high school diploma and no college and some college faced unemployment rates of 3.9 percent and 3.0 percent, respectively.
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| Figure A: Employment and Average Hourly Wages in the U.S. Manufacturing Sector |
