Job Growth Remains Lackluster - July 6, 2012
The nation continued to create jobs last month, but, unfortunately, at more or less the same listless pace that positions have been added for the past three months. Specifically, the Labor Department announced earlier this morning that the United States had added 80,000 non-farm payrolls in June. That job creation level, while up slightly from the upwardly revised 77,000 payrolls added in May (initially estimated at 69,000 jobs), was still 20,000 below expectations and more than a hundred thousand jobs below the level that most economists believe is needed to materially lower the unemployment rate.
As for the jobless rate, it held steady at 8.2% last month, which was the expected result. Here, too, there has been some moderate progress, as the unemployment rate had approximated 10% during the depths of the 2007-2009 recession. However, the progress here has been insufficient, and well short of the major strides that had been made after the cessation of most prior economic downturns.
As for job growth, in addition to the 80,000 payrolls added in the aggregate, the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.2 million. Ominously, as well, is the fact that after the nation had created a monthly average of 226,000 jobs in the first quarter of this year, a rate that if it had continued would likely have proved crucial in lowering the magnitude of joblessness, the nation added just 75,000 non-farm jobs a month, on average, during the just completed second quarter. Slower payroll growth in the second quarter occurred in most industries.
Indicative of the struggles of the employment sector is the fact that while employment in the pivotal manufacturing sector continued to climb in the second quarter, the increase, at 10,000 per month, on average, was less than a quarter of the initial-period average monthly increase of 41,000. Employment also continued to trend up in health care and wholesale trade. However, employment in a range of industries, such as construction, retail trade, and government service, showed little overall change. The latest sales data in the retail sector and the still-sluggish housing metrics issued in recent weeks would affirm the payroll trends in those areas.
Finally, the average workweek for all employees on private non-farm payrolls edged up by 0.1 hour, to 34.5 hours, in June, while the average hourly earnings for all employees on private non-farm payrolls increased by six cents, to $23.50 an hour, a decent increase. All in all, it was another uninspiring economic report, and follows rather dour June readings issued earlier this week on manufacturing activity, non-manufacturing activity, and store sales at the nation's major retail chains. All of this still suggests that the nation's rate of GDP growth, an unprepossessing 1.9% in the first quarter, may not have been all that different in the just-ended second three months.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.