June jobs report: a tale of two very different surveys – but both far from full recovery HEADLINES: 850,000 jobs added. Of these, 662,000 were private sector jobs, and 188,000 were government jobs, chiefly in education. The alternate, and more volatile measure in the household report indicated a gain of only 128,000 jobs, which factors into the unemployment and underemployment rates below.The total number of employed is still 6,764,000, or -4.4% below its pre-pandemic peak. At this rate jobs have grown this year, it will take another full year for employment to completely recover.U3 unemployment rate *rose* 0.1% to 5.9%, compared with the January 2020 low of 3.5%.U6 underemployment rate declined -0.4% to 9.8%, compared with the January 2020
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June jobs report: a tale of two very different surveys – but both far from full recovery
HEADLINES:
- 850,000 jobs added. Of these, 662,000 were private sector jobs, and 188,000 were government jobs, chiefly in education. The alternate, and more volatile measure in the household report indicated a gain of only 128,000 jobs, which factors into the unemployment and underemployment rates below.
- The total number of employed is still 6,764,000, or -4.4% below its pre-pandemic peak. At this rate jobs have grown this year, it will take another full year for employment to completely recover.
- U3 unemployment rate *rose* 0.1% to 5.9%, compared with the January 2020 low of 3.5%.
- U6 underemployment rate declined -0.4% to 9.8%, compared with the January 2020 low of 6.9%.
- Those on temporary layoff declined -12,000 to 1,811,000.
- Permanent job losers declined -47,000 to 3,187,000.
- April was revised downward by -9,000, while May was revised upward by 24,000, for net gains of 15,000 jobs compared with previous reports.
Leading employment indicators of a slowdown or recessionThese are leading sectors for the economy overall, and will help us gauge how strong the rebound from the pandemic will be. These were mixed:
- the average manufacturing workweek decreased -0.2 hours to 40.2 hours. This is one of the 10 components of the LEI.
- Manufacturing jobs rose 15,000. Since the beginning of the pandemic, manufacturing has still lost -481,000 jobs, or -3.8% of the total.
- Construction jobs fell -7,000. Since the beginning of the pandemic, -238,000 construction jobs were lost, or -3.1% of the total.
- Residential construction jobs, which are even more leading, rose by 2,500. Since the beginning of the pandemic, 33,100 jobs were gained in this sector, or 3.4%.
- temporary jobs rose by 3,300. Since the beginning of the pandemic, there have still been -278,500 jobs lost or -9.5% of all temporary jobs.
- the number of people unemployed for 5 weeks or less declined by -42,000 to 1,981,000, which is -101,000 *lower* than just before the pandemic hit.
- Professional and business employment rose by 72,000, which is still 633,000, or about -2.9%, below its pre-pandemic peak.
Wages of non-managerial workers
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.10 to $25.68, which is a 3.7% YoY gain. This is excellent news, considering that many low-wage workers were recalled to work.
Aggregate hours and wages:
- the index of aggregate hours worked for non-managerial workers declined by -0.1%, which is a loss of -4.4% since just before the pandemic.
- the index of aggregate payrolls for non-managerial workers rose by 0.3%, which is a gain of 2.5% since just before the pandemic.
Other significant data:
- Leisure and hospitality jobs, which were the most hard-hit during the pandemic, increased 343,000, but is still 2.2 million, or 12.9% below their pre-pandemic peak.
- Within the leisure and hospitality sector, food and drink establishments gained 194,000, but is still -1,270,200, or -10.3% below their pre-pandemic peak.
- Full time jobs decreased -183,000 in the household report.
- Part time jobs increased 408,000 in the household report.
- The number of job holders who were part time for economic reasons, declining by 644,000 to 4,627,000, which is an increase of 229,000 since before the pandemic began.
SUMMARY
This month saw two very different components of the overall jobs report. The establishment survey details how many jobs were added or lost in various sectors. The household report, which tells us things about unemployment and underemployment, was very weak although still positive.
There was lots of good news in the hardest-hit sectors of leisure and hospitality and education, which were responsible for over half of all the job gains; while manufacturing, construction, and professional and business services were either weakly positive or even slightly negative. Wage growth also continued strongly, which is certainly good news.
On the other hand, full-time jobs as measured in the household report actually declined. But both permanent and temporary layoffs decreased, as did the newly unemployed, as did involuntary part-time employment – all of which are very good.
Putting everything together, this month’s report showed substantial and steady progress, but nowhere near enough to fully recover from the pandemic for many months to come (and that’s not taking into account what may await as a result of increasing COVID cases due to the “delta” variant).