US economy adds 224,000 jobs; unemployment rate ticks up to 3.7%
Monday, July 08, 2019
What a difference a month can make. In June, U.S. payrolls grew by 224,000 jobs, a sharp rebound from 75,000 new hires in May, according to the Bureau of Labor Statistics. June’s rate of unemployment ticked up to 3.7% from May’s 3.6%.
The jobless rates for major worker groups (e.g., men and women, Asians, blacks, Hispanics and whites, adults and teens), the number of long-term unemployed persons, and labor-force participation rate remained nearly the same in June from May, the BLS reported. The June employment-to-population ratio was 60.6% for the fourth straight month.
Fears of a slowing economy after the May jobs report dimmed with June’s 224,000 new hires. Following revisions, new hires have averaged 171,000 a month during the past three months.
The weekly hours of work were 34.4 hours in June, matching May’s numbers.
Meanwhile, hourly wage growth slowed slightly in June. "Average hourly earnings for all employees on private nonfarm payrolls rose by 6 cents to $27.90, following a 9-cent gain in May," according to the BLS. "Over the past 12 months, average hourly earnings have increased by 3.1%."
Valerie Wilson is an economist with the Economic Policy Institute in Washington, D.C. "While June’s 3.1% growth rate is higher than the slow rate we saw earlier in the recovery, it is still below the rate we’d expect to see in a strong economy," according to her.
"To be at genuine full employment, wage growth would have to be at least 3.5%, and for a consistent period of time to allow labor’s share of corporate sector income to recover."
In June, small business hiring (payrolls of 1-49 employees) dropped by 23,000 jobs compared with a loss of 52,000 jobs in May, according to the ADP National Employment Report. Things were better for midsize employers (50-499 employees), hiring 60,000 new workers in June compared with payroll growth of 11,000 jobs in May. Hiring at large firms (500 or more workers) held steady in June, with 65,000 jobs added compared with 68,000 workers in May.
The ADP National Employment Report comes from ADP nonfarm private sector payroll data representing 411,000 U.S. clients and nearly 24 million employees, published in alliance with Moody's Analytics. The U.S. labor force is 157 million workers.
According to the ADP/Moody’s report, the services sector added 117,000 new jobs in June, up from 71,000 jobs in May. Professional and business services employment added 32,000 new hires in June compared with 22,000 jobs in May.
Payrolls in the goods-producing sector dropped 15,000 jobs, an improvement from 43,000 job losses in May.Manufacturing firms gained 7,000 new hires after losing 3,000 jobs in May.
"Job growth started to show signs of a slowdown," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement. "While large businesses continue to do well, small businesses are struggling as they compete with the ongoing tight labor market. The goods producing sector continues to show weakness."
Mark Zandi is chief economist for Moody’s Analytics. "The job market continues to throttle back," according to him. "Job growth has slowed sharply in recent months, as businesses have turned more cautious in their hiring. Small businesses are the most nervous, especially in the construction sector and at bricks-and-mortar retailers."
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