July 07, 2016
The Labor Department reported that the economy added 287,000 jobs in June, a sharp bounce back from the 11,000 jobs now reported for May. A big factor in the reversal was the end of the Verizon strike which subtracted 37,000 jobs from the May growth number and added the same amount to June, but even adjusting for this effect the June growth figure is much stronger.
The job gains were widely spread across sectors. Health care added 38,500 jobs, retail added 29,900, while the government sector added 22,000, with 17,000 at the local government level. Manufacturing added 14,000 jobs with 13,000 of these in food manufacturing. Construction was flat and mining lost another 6,400 jobs.
The average hourly wage is 2.6 percent above its year-ago level. In the last three months, it has risen at a 2.7 percent annual rate compared with its level for the prior three months.
The household survey showed a bleaker picture. The unemployment rate rose modestly to 4.9 percent. The employment-to-population ratio (EPOP) fell to 59.6 percent as employment measured by the survey increased by just 67,000. Employment in the household survey is still more than 200,000 below its March level.
By demographic group the most disturbing item is the reported rise in the unemployment rate among black teens to 31.2 percent. It had been 23.3 percent in February. These data are highly erratic, but the trend is large enough that it could reflect a substantial deterioration in the labor market.
Employment patterns by education are showing an interesting pattern in this recovery. Over the last year the unemployment rate for college grads has not changed while their EPOP is down by 0.3 pp. By contrast, the unemployment rate for those with a high school degree has fallen by 0.4 pp and by 0.6 pp for those with less than a high school degree. The increased demand for skills is not obvious in this picture.
