Employment Update - July 5, 2016

EMPLOYMENT UPDATE  Through JUNE 2016

Total non-farm payroll employment increased by 287,000 in June, and the unemployment rate rose to 4.9 percent, the U.S. Bureau of Labor Statistics reported. Job growth occurred in leisure and hospitality, healthcare and social assistance, and financial activities. Employment also increased in information, mostly reflecting the return of workers from a strike.

 Household Survey Data

The unemployment rate increased by 0.2 percentage point to 4.9 percent in June, and the number of unemployed persons increased by 347,000 to 7.8 million. These increases largely offset declines in May and brought both measures back in line with levels that had prevailed from August 2015 to April.

Among the major worker groups, the unemployment rates for adult women (4.5 percent) and Whites (4.4 percent) rose in June. The rates for adult men (4.5 percent), teenagers (16.0 percent), Blacks (8.6 percent), Asians (3.5 percent), and Hispanics(5.8 percent) showed little or no change.

The number of persons unemployed less than 5 weeks increased by 211,000 in June, following a decrease in the prior month. At 2.0 million, the number of long-term unemployed (those jobless for 27 weeks or more) changed little in June and accounted for 25.8 percent of the unemployed.

In June, the number of job losers and persons who completed temporary jobs rose by 203,000 to 3.8 million, after a decline in May.

Both the labor force participation rate, at 62.7 percent, and the employment-population ratio at 59.6 percent changed little in June.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) decreased by 587,000 to 5.8 million in June, offsetting an increase in May. These 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.

 In June, 1.8 million persons were marginally attached to the labor force, about unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 502,000 discouraged workers in June, down by 151,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in June had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total non-farm payroll employment increased by 287,000 in June, after changing little in May (+11,000). In June, job growth occurred in leisure and hospitality, health care and social assistance, and financial activities. Employment also rose in information, largely reflecting the return of workers from a strike.

Leisure and hospitality added 59,000 jobs in June, following little employment change in the prior month. In June, employment increased in performing arts and spectator sports (+14,000), after edging down in May. Employment in food services and drinking places changed little over the month (+22,000). Job gains in leisure and hospitality have averaged 27,000 per month thus far this year, down from an average of 37,000 in 2015, reflecting slower job growth in food services and drinking places.

Health care and social assistance added 58,000 jobs in June. Health care employment increased by 39,000 over the month. Job gains occurred in ambulatory health care services (+19,000) and hospitals (+15,000), about in line with average monthly gains over the prior 12 months in each industry. Within social assistance, child day care services added 15,000 jobs in June.

Employment in financial activities rose by 16,000 in June and has risen by 163,000 over the year.

Employment in information increased by 44,000 in June. Employment rose in telecommunications (+28,000), largely reflecting the return of workers from a strike. Employment increased in motion picture and sound recording industries (+11,000) after a decrease of similar magnitude in May.

Employment in professional and business services continued to trend up in June (+38,000). Thus far this year, the industry has added an average of 30,000 jobs per month, compared with an average monthly gain of 52,000 in 2015.

Employment in retail trade edged up by 30,000 in June, after changing little over the prior 2 months. In June, job gains occurred in general merchandise stores (+9,000) and in health and personal care stores (+5,000). Retail trade has added 313,000 jobs over the year.

Employment in other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, and government, showed little or no change in June.

In June, the average workweek for all employees on private non-farm payrolls was 34.4 hours for the fifth consecutive month. The manufacturing workweek (40.7 hours) and manufacturing overtime (3.3 hours) were also unchanged over the month. The average workweek for production and non-supervisory employees on private non-farm payrolls was unchanged at 33.6 hours.

In June, average hourly earnings for all employees on private non-farm payrolls edged up (+2 cents) to $25.61, following a 6-cent increase in May. Over the year, average hourly earnings have risen by 2.6 percent. Average hourly earnings of private-sector production and non-supervisory employees increased by 4 cents to $21.51 in June.

The change in total non-farm payroll employment for April was revised from +123,000 to +144,000, and the change for May was revised from +38,000 to +11,000. With these revisions, employment gains in April and May combined were 6,000 less, on net, than previously reported. Over the past 3 months, job gains have averaged 147,000 per month.

Source: U.S. Department of Labor Statistics and Integr8staff, LLC.