Unemployed Americans wait in line for to fill out applications for jobless benefits. (Photo: Reuters)
The Labor Department June jobs report shows the U.S. economy added 287,000 jobs last month, easily beating the median forecast that called for 175,000. The unemployment rate rose to 4.9%, slightly higher than the 4.8% expected by the median forecast.
The labor force participation rate rose barely to 62.7%, up from 62.6% employment-population ratio, at 59.6%, changed little in the month of June.
In June, the number of job losers and persons who completed temporary jobs increased by 203,000 to 3.8 million, after a decline in May. That influenced the number of persons employed part time for economic reasons–sometimes referred to as involuntary part-time workers–which decreased by 587,000 to 5.8 million in June. That loss helped to offset an increase in May, but the the number of individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job is still far too high.
Further, the number of jobs created is high, but the quality of those jobs is low. As we saw in the ADP National Employment report covering private-sector job creation, which precedes Bureau of Labor Statistics (BLS) report conducted for the Labor Department, lower-paying service sector job growth is largely behind the headline numbers.
Employment in mining continued to trend down in June (-6,000). Since reaching a peak in September 2014, mining has lost 211,000 jobs. Employment in other major higher-paying industries–including construction, manufacturing, wholesale trade, transportation and warehousing–showed little or no change in June.
As a result, the U.S. economy has been plagued by part-time job creation and stagnant wage growth. In June, wages, or average hourly earnings for all employees on private nonfarm payrolls, barely increased (+2 cents) to $25.61. That followed a 6-cent increase in May, which was unfortunately one of the largest in years. Over the year, average hourly earnings have risen by just 2.6%.
Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.51 in June.
