June Jobs Report Better Than Expected

Posted July 08, 2017

The unemployment rate inched higher to 4.4% from 4.3%, although more people were actively looking for work during the month. It was 1.5 percentage points down from a year ago, and it helped create the smallest gap between white and black employment on record. Over the year, the number of long-term unemployed was down by 322,000. As more workers begin looking for jobs, that can push the unemployment rate higher.

"If you are going to describe today's report as 'strong, ' my advice would be to refrain from telling that to men in the prime working age 25-to-54-year-old age cohort because their employment pool shrunk 21,000 in June and this came atop a 92,000 falloff in May".

The government also revised up its estimate of job growth for April and May by a combined 47,000.

In a June 29, 2017 update, the Congressional Budget Office said it expects the US labor market to tighten in the next two years, as greater demand for workers will push the unemployment rate down and the labor force participation rate up.

It is also important to note that automakers often shut down assembly plants for a bit of annual planning during the beginning of July and this tends to increase unemployment claims a bit.

Economists responding to a Bloomberg survey predicted that the economy would add 170,000 jobs in June and ADP's monthly forecast projected only 158,000 new jobs.

Social assistance employment increased by 23,000 in June.

The broad-based S&P 500 rose 0.3 percent to 2,417.58, while the tech-rich Nasdaq Composite Index advanced 0.6 percent to 6,125.02. Securities, commodity contracts, and investments added 5,000 jobs over the month.

Sterling fell to a more than one-week low of $1.2871 and was last down 0.7 percent at $1.2883.

The latest numbers show that despite a shortage of skilled workers, companies are still hiring.

The BLS said employment in food services continued on an upward trend in June, rising by 29,000.

This has been a tough year for the retail industry. This puts average net jobs creation for the past three months of +193,667 (rounded).

"The headline number was a source of surprise, and the revisions were encouraging". That's only slightly below last year's pace. The long-term unemployment remained largely unchanged for the month, though, as did the labor force participation and the employment participation ratio. "We've always been able to find them". Average hourly earnings rose by 4 cents to $26.25.

Even as hopes for a "Trump bump" that would stimulate the economy recede, the economy continues to chug along, with steady if unimpressive growth. Wage growth has been one of the key missing ingredients through much of the recent economic expansion. The productivity rate stood at about 2.6 percent in the years leading up to the recession.

Economic downturns are often followed by a period of robust growth.

By contrast, Obama handed Trump an economy that was close to what economists consider full employment. That grand infrastructure plan he talked about during the campaign, and which he's mentioned several times since becoming President, remains nothing but vaporware at the moment.