Skip to content Skip to footer

Job Growth Bounces Back in June, But Unemployment Edges Upward

While job numbers bounce back from May, wage growth appears to be slowing rather than accelerating.

The Bureau of Labor Statistics reported that the economy added 21,000 construction jobs in June after adding just 5,000 in May. While job numbers bounce back from May, wage growth appears to be slowing rather than accelerating.

The Bureau of Labor Statistics reported that the economy added 224,000 jobs in June, a sharp bounce back from the revised figure of 72,000 jobs reported for May. With a small downward revision to the April data, this brings the three-month average to 171,000. The average hourly wage is up 3.1 percent from the year-ago level. There is evidence of further slowing, with the annualized rate of increase from the first quarter to the second quarter at just 2.7 percent.

There was little change in the household survey. Unemployment edged up slightly to 3.7 percent, but this was primarily due to an increase in labor force participation. The employment-to-population ratio (EPOP) was unchanged at 60.6 percent for the fourth consecutive month.

The faster job growth in the establishment survey should reduce fears about a substantial slowing or a recession. Although there were many anomalies in the data.

Construction added 21,000 jobs after adding just 5,000 in May. The 13,000 average of the last two months is still below the 18,700 average for the past year. Manufacturing added 17,000 jobs, the highest number since January. However, even with this growth and a modest uptick in the average workweek, aggregate hours are still 0.1 percent below their December level.

Wages in manufacturing continue to lag the overall average, rising just 2.3 percent over the last year. While the sector has historically been a source of good-paying jobs for workers without college degrees, this is becoming less true. The overall average hourly wage passed the wage in manufacturing in June of 2018 and is now 25 cents higher. For production workers, the cross point was September of 2006.

Much of the story is the loss of unionized jobs in the sector, with almost 40 percent disappearing as a result of the explosion in the trade deficit from 2000 to 2007. Another 14 percent have been lost since 2007, putting the number of union members in manufacturing at well below half of the 2000 level.

The retail sector lost 5,800 jobs, its fifth consecutive month of job loss. Employment in the sector is down by 48,200 (0.3 percent) from its year-ago level. Transportation added 23,900 jobs in June after adding just 3,300 jobs in May. Professional and technical services added 29,900 slightly above its average of 24,700 for the last year.

The health care sector added 34,900 jobs after adding just 17,700 in May. The May figure is in line with the 32,700 average over the last year. Social assistance added 15,600 jobs, slightly above its average of 11,300 over the last year.

Restaurant employment fell by 300 compared to the average growth of 21,500 over the last year. This is hard to explain in a healthy economy in a month without any especially unusual weather events. It could mean that restaurants are having a hard time attracting workers in a tightening labor market.

The other especially unusual movement was the increase in state and local government employment outside of education. This rose by 6,100 at the state level and 26,400 at the local level, the latter being the largest increase since July of 2009. It’s not clear what would drive this rise, but it is unlikely to continue.

In the household survey, the unemployment rate for black men fell to 5.8 percent, the lowest on record, but this was entirely due to a sharp reported drop in labor force participation. The EPOP for black men fell by 0.6 percentage points.

The employment rate for prime-age workers was unchanged in June. The duration measures for unemployment were mixed, with the average duration falling, while the median duration rose, as did the share of long-term unemployed.

One encouraging item was a jump in the share of unemployment due to voluntary quits. This rose to 14.7 percent, the highest level since October of 2000.

After the weak May jobs numbers and other data suggesting a weakening of the economy, the June jobs numbers should be seen as a positive sign. On the other hand, wage growth appears to be slowing rather than accelerating. While workers are seeing modest real wage growth, it is much less than would be expected with the lowest unemployment rate in 50 years.

We’re not going to stand for it. Are you?

You don’t bury your head in the sand. You know as well as we do what we’re facing as a country, as a people, and as a global community. Here at Truthout, we’re gearing up to meet these threats head on, but we need your support to do it: We must raise $23,000 before midnight tomorrow to ensure we can keep publishing independent journalism that doesn’t shy away from difficult — and often dangerous — topics.

We can do this vital work because unlike most media, our journalism is free from government or corporate influence and censorship. But this is only sustainable if we have your support. If you like what you’re reading or just value what we do, will you take a few seconds to contribute to our work?