June Jobs: Continued, Solid Gains, but That 5.3% Unemployment Rate Makes the Job Market Look Tighter Than It Is
Today’s jobs report was a bit weaker than expected, and a bit weaker than it looked at first blush. While payrolls were up 223,000 in June, in line with expectations, and the unemployment rate fell to a record low in this recovery of 5.3%, mitigating factors include:
–downward revisions in payrolls for April and May of 60,000 combined;
–the fall in unemployment was exclusively due to people leaving the labor force, not jobseekers finding work;
–thus, the labor force participation rate ticked down a significant 0.3 percentage points to 62.6%, its lowest level since the late 1970s, though see below re this important trend;
–hourly wage growth was flat in June, and is up 2% over the past year, a slight deceleration from last month’s report;
–average weekly hours worked were also unchanged, so weekly earnings were also up 2%;
–factory employment growth remains weak, up 4,000 and little changed over the past five months (construction was also a weak spot in June, adding no net new jobs).More ...