Economy Adds 213,000 Jobs in June, Unemployment Edges Up to 4 Percent

The Bureau of Labor Statistics reported the economy added 213,000 jobs in June. With upward revisions to the data from the prior two months, the average gain over the last three months was 211,000. The unemployment rate edged up to 4 percent, but this was due to a reported surge of 601,000 people entering the labor force. The overall employment-to-population ratio (EPOP) was unchanged at 60.4 percent, tied for a high for the recovery. The EPOP for prime-age workers (ages 25 to 54) edged up to 79.3 percent, tying the high for the recovery reached in February.

In spite of the strong job gains and widely voiced complaints from employers about difficulties in finding workers, wage growth does not appear to be accelerating. The average hourly wage has increased by just 2.7 percent in the last year. The increase is the same for both overall employment and production and nonsupervisory workers.

In fact, if we compare the average wage for the last three months (April, May, and June) with the prior three months (January, February, and March), it appears to be slowing slightly, with an annualized growth rate of just under 2.6 percent. This suggests difficulties of finding qualified workers are hugely overstated.

The job gains in the establishment survey were broadly based. Manufacturing led the way with an increase of 36,000 jobs, 12,000 of which were in autos. In spite of healthy job growth, wage growth is especially weak in manufacturing, rising just 1.7 percent over the last year.

Health care added 25,200 jobs, almost exactly in line with its average over the last year. Professional and technical services added 25,100 jobs in June, more than its average of 18,900 over the last year. Jobs in educational services jumped 18,900, compared with an average of just over 5,500 in the last year. This may be due to erratic seasonal factors. Restaurants added 16,400 jobs in June, under the average of 18,400 over the year. The government sector added 11,000 jobs, mostly due to an increase of…

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