Even though the economy created fewer jobs than analysts had projected for June, job growth was still solid. The unemployment rate edged down by 0.2 percent, but that was mostly due to a shrinking workforce.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 223,000 nonfarm job gains in June. Local, state and federal governments netted no job gains, resulting in 223,000 total net job gains.
Although the total net job gains were solid, analysts had estimated about 7,000 more. The unemployment rate edged down from 5.5 to 5.3 percent, the lowest rate since April of 2008 when it was 5.0 percent. However, thousands of workers dropped out of the labor force, which is mostly what lowered the unemployment rate. The bottom line is, this is not a glorious report, but it’s not a bad one either.
The private sector has now gained nonfarm jobs for 64 consecutive months since the Great Recession. The unemployment rate has dropped 4.7 percentage points from the recessionary high of 10.0 percent in October 2009.
The BLS also revised job gains for April and May, showing that the economy netted 60,000 fewer jobs than the BLS had previously estimated. After BLS revisions, net job gains have averaged 250,000 per month in the past year.
Job growth continued in the professional and business services industry at 64,000, with temporary help services (temp workers) netting 20,000 of those.
At 40,000, job growth also continued in health care. The industry has netted a monthly average of 34,000 jobs over the past year. Much of the industry’s steady job growth over the past few years, even throughout the Great Recession, is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act (“Obamacare”) as well.
The retail trade industry added 33,000 jobs in June, with general merchandise stores netting one-third of those. The industry as a whole has netted 300,000 jobs over the year.
Manufacturing, an industry that economists consider to be a gauge of labor-market health, netted only 4,000 jobs in June. Construction, also a measure of labor-market health, gained no jobs. Construction has added a total of 273,000 jobs since May of 2014.
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (18.1 percent) followed by blacks (9.5), Hispanics (6.6), adult women (4.8), adult men (4.8), whites (4.6) and Asians (3.8, not seasonally adjusted). All groups but teenagers experienced slight to somewhat-significant drops in their June unemployment rates. Teenagers experienced a 0.2 percent rise from May.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 2.5 percent unemployment rate in June, 0.2 percent lower than in May. Those in the same age group and who don’t have high school diplomas suffered a much-higher 8.2 percent rate, 0.4 percent lower than in May.
As indicated above, the unemployment rated edged down in June mostly because the civilian labor force decreased by 432,000. (After increasing by 397,000 in May.) Most of the June decrease was due to baby boomers retiring and unemployed workers abandoning their job searches.
For the BLS to count workers as officially unemployed, workers must be actively seeking jobs in the four weeks preceding the count. The number of workers that the BLS counted as unemployed in June was 8.3 million, down from 8.7 million in May.
The count of unemployed workers does not include those who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers in June was 6.5 million, down from 6.7 million in May.
The average workweek for all part-timers and full-timers in the private sector remained at 34.5 hours from March through June. Their average hourly earnings were unchanged at $24.96, after rising by 8 cents in May. Average hourly earnings have risen by 2.0 percent in a year. Average hourly earnings rose by 2 cents to $20.99 for private-sector production and nonsupervisory employees.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs.
The number of marginally-attached workers in June was 1.9 million, the same as in May. Among the marginally-attached, 653,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs — at least not for them. The number of discouraged workers was up by a significant 90,000 from the 563,000 that the BLS initially reported for May. (The BLS does not seasonally adjust any of the figures in this paragraph.)
The number of long-term unemployed workers, those who have been without jobs for 27 weeks or longer, was 2.1 million in June, down from 2.5 million in May. These workers accounted for 25.8 percent of the unemployed. The number of long-term unemployed workers has declined by 955,000 over the past 12 months. Standard state unemployment benefits last only up to 26 weeks without extensions.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.
For more details about the June 2015 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the July 2015 unemployment rate and job numbers on August 7. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
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Certain figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.