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You are Here: Home > Blog > Unemployment Rate – June 2016

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Unemployment Rate – June 2016

Friday, July 8th, 2016

The job numbers in June showed a huge rebound from the dismal numbers in May, even though the unemployment rate ticked up a bit.

According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 265,000 nonfarm job gains in June. Local, state and federal governments netted 22,000 jobs, resulting in 287,000 total net job gains. Economists had expected 170,000 -180,000 total job gains, according to various sources.

Some of the rebound is attributed to 36,000 Verizon workers returning to work after a strike. Even so, the economy still netted 251,000 job gains.

The BLS revised job gains for April and May 2016, showing that the economy netted 6,000 fewer jobs than the BLS had previously estimated. After that revision, job gains have averaged only 147,000 per month in the past three months.

The unemployment rate edged up from 4.7 to 4.9 percent in May, mostly because more unemployed workers entered or re-entered the job market.

The private sector has now gained nonfarm jobs (however meager in May) for 76 consecutive months since the Great Recession. The unemployment rate has dropped 5.1 percentage points from the recessionary high of 10.0 set in October 2009. (More information about the unemployment rate is below.)

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The leisure and hospitality added 59,000 jobs in June. Job gains across this industry have averaged 27,000 per month so far in 2016, down from an average of 37,000 in 2015.

At 39,000, job growth continued in health care as it has for years, even throughout the Great Recession. The industry has added 526,000 jobs in the past year alone. Much of the industry’s steady job growth over the past few years 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.

Construction, one the measures of labor-market health, gained zero jobs in June after losing 15,000 in May. Manufacturing, also a measure of labor-market health, gained 14,000 jobs after losing 10,000 in May.

The mining industry continued losing jobs in June (-5,000), again due mostly to lower oil prices. The industry has lost 211,000 jobs since reaching a job-growth peak in September 2014. Most of the job losses are in mining support operations. (See Table B by the BLS for more job numbers listed by industry.)

Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (16.0 percent) followed by Blacks (8.6), Hispanics (5.8), adult men (4.5), adult women (4.5), Whites (4.4) and Asians (4.3, not seasonally adjusted). The unemployment rates for adult women and Whites rose in June. No other group experienced a significant change.

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, up slightly from 2.4 in May. Those in the same age group and who don’t have high school diplomas suffered a much higher 7.5 percent rate, significantly up from 7.1 in May. (See Table A-5 by the BLS for more information about the unemployment rate by education level.)

Unemployment Rate 2008 to 2016
Unemployment Rate Chart 2008 to 2016

The unemployment rate has been hovering between 4.7 and 5.0 percent all this year so far. Economists consider an unemployment rate of 5.0 percent to be normal.

In order for the BLS to count workers as unemployed, they must have been actively seeking jobs in the four weeks preceding the count. The number of workers that the BLS counted as unemployed in June was 7.8 million, up by 347,000 from the month before. That’s at least partly why the rate increased by 0.2 percent from 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 5.8 million, down by 587,000 from May.

The average workweek for all part-timers and full-timers in the private sector was 34.4 hours, unchanged for the past five months. Their average hourly earnings increased by 2 cents to $25.61 in June, after increasing by 6 cents in May. Average hourly earnings have risen by 2.6 percent in a year. For private-sector production and nonsupervisory employees, average hourly earnings increased by 4 cents to $21.51, after a 3-cent hourly increase in May.

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 — at least not for them.

The number of marginally-attached workers in June was 1.8 million, up from 1.7 million in May. Among the marginally-attached, 502,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs. (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 2.0 million in June, up from 1.9 million in May. These workers accounted for 25.8 percent of the unemployed. 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 2016 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the July 2016 unemployment rate and job numbers on August 5. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.

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Except where otherwise noted, 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.

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