U.S. Job Growth June 2017 — Exceeding Consensus Estimates With Upward Revisions in Past Months

The U.S. added 222,000 net new additional jobs in June 2017 — preliminary, on a seasonally adjusted annualized rate. This materially outpaced the 180,000 job gain consensus by economists. In addition, job gains for April and May 2017 were revised upwards, with April increasing from 174,000 to 207,000 and May now 152,000 from 138,000. The unemployment rate rose from 4.3 percent in May 2017 to 4.4 percent in June, but remains well below the Federal Reserve’s 5.0 percent definition of full employment

The net job gain in the prior 12 months totaled 2.238 million. While the monthly gain was improved, total net job gains in the prior 12-months still significantly trails the 3.129 million level seen in February 2015, as shown in the graph.

7-8-17 graph1

The U.S. continues the trend of having more jobs than any time in history, as shown in the following table. From the pre-recession peak in January 2008, total job loss was 8.697 million to the February 2010 trough. Since then, the U.S. has created 16.671 million net new jobs.

7-8-17 graph2

Employment in the Leisure and Hospitality sector is a good proxy of the overall health index of the U.S. economy. People do not spend money on vacations, cruises, entertainment spas or dinners out unless they feel good about the future economy. My premise is that the U.S. economic outlook is healthy as long as the employment growth rate in Leisure and Hospitality exceeds that of the country overall. Current Leisure and Hospitality job growth in the prior 12 months was 2.01 percent versus 1.55 percent for the total economy. I see no recession on the horizon at this time foregoing unanticipated economic shocks.

7-8-17 graph3

Average hourly earnings were up 4 cents in June versus May to $26.25. Hourly pay has risen 63 cents in the past 12-months, a gain of 2.5 percent. Hourly earnings monthly since 2007 are shown in the following graph.

7-8-17 graph4

Other items in the March 2017 jobs report:

  • The Number of Persons Unemployed for Less Than 5 Weeks increased by 151,000 from May to 2.154 million, but was down from 2.418 million a year ago, a decline of 113,000
  • Long-Term Unemployed (jobless for 27 or more weeks), now at 1.664 million, was unchanged from May but is down 322,00 from a year ago
  • Civilian Labor Force Participation Rate is now 62.8 percent, unchanged from a year ago (62.7 percent)
  • Unemployment Rates varied significantly with educational attainment:

7-8-17 graph5

  • Employment-Population Ratio is now 60.1 percent versus 59.6 percent a year ago – the bigger the better
  • Number of Persons Employed Part Time for Economic Reasons (also known as involuntary part-time workers) are individuals desiring full-time employment but either had their hours cut back or cannot find a full-time job), increased by 107,000 from May but is down 494,000 from a year ago to 5.326 million
  • Marginally Attached to the Labor Force (not currently counted in the labor force, want and are available for work and had looked for a job in the prior 12 months) dropped by 197,000 in the past year to 1.582 million. Within that group, 514,000 were classified as Discouraged Workers – persons not currently looking for work because they believe there are no jobs available for them. Discouraged Workers increased by 12,000 in the past 12 months
  • Health Care gained 37,000 jobs in June and has averaged 24,000 net new jobs monthly thus far in 2017 versus 32,000 monthly in the same period in 2016
  • Social Assistance added 23,000 jobs in the past month and 115,000 jobs in the past 12-months
  • Financial Activities 17,000 new jobs in June, 169,000 in the past 12-months
  • Professional and Business Services was up 35,000 in June and 624,000 in the prior 12-month
  • Food Services and Drinking Places added 29,000 jobs in June and 277,000 in the past year
  • Mining (includes oil and gas exploration and production) added 8,000 in the month
  • Retail Trade grew 8,100 jobs in June following a 7,200 decline in May
  • Leisure and Hospitality jobs increased by 36,000 jobs in June and are up by 121,000 in the past three months

To read the entire release from the Bureau of Labor Statistics click https://www.bls.gov/news.release/pdf/empsit.pdf

Ted

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