US Labor Market Improves In June
CHAPEL HILL, NC (July 3, 2014) – In June, the national labor market added 288,000 more jobs than it lost due primarily to gains in the private sector. At the same time, the national unemployment rate dropped to 6.1 percent. The drop in unemployment was a positive development attributable to more people reporting themselves as being employed. Nevertheless, unemployment in the United States remains elevated, while other important measures of labor utilization remain near depressed levels.
“June was the 45th-straight month in which the United States experienced net job growth,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the year, the economy has netted an average of 208,000 jobs per month, a pace that, while positive, still is insufficient to replace all of the jobs lost since 2007 and to accommodate subsequent population growth.”
In June, the nation’s employers added 288,000 more payroll jobs than they cut. Some 91 percent of the gain originated in the private sector (+262,000), while public employers added 26,000 more positions than they cut. Within the private sector, payroll levels rose the most in the trade, transportation, and utilities sector (+72,000, with 55.8 percent of the gain originating in the retail trade subsector), followed by the professional business services sector (+67,000, with 51.3 percent of the gain occurring in the administrative and waste services subsector), the leisure and hospitality services sector (+39,000, with 89.7 percent of the gain originating in the accommodation and food service sector), and the education and health services sector (+38,000). Payroll levels in the other major industry groups either rose in June or essentially held steady.
Additionally, the payroll employment numbers for April and May underwent revisions; with the updates, the economy netted 528,000 jobs over those two months, not the 499,000 positions previously reported. With those changes, the average pace of monthly job growth in the United States recorded over the past year rose to 208,000 from 198,000.
“The United States has experienced steady job growth for the past 3.75 years, but the pace of growth has been modest relative to the severity of the job losses caused by the last recession,” noted Quinterno. “The current average monthly rate of job growth is insufficient to close the nation’s jobs gap—a gap now estimated at 6.7 million jobs—anytime soon.”
Data from the household survey offered additional positive news about the health of the United States’ labor market. In June, the number of Americans who reported having jobs rose by 407,000 (+0.3 percent); put differently, more people reported having jobs in June than in May. At the same time, the overall size of the labor force rose by 81,000 persons (+0.1 percent) between May and June. Meanwhile, the share of working-age Americans participating in the labor force held steady in June, while the share of working-age Americans with a job ticked up over the month.
In June, 9.5 million Americans were unemployed (6.1 percent), while 7.5 million individuals worked part time despite preferring full-time positions. Another 676,000 individuals (not seasonally adjusted) were so discouraged about their job prospects that they had stopped searching for work altogether. Those persons were part of a larger population of 2.1 million Americans who were marginally attached to the labor force.
Compared to a year ago, 2.1 million more Americans were working in June, and 2.3 million fewer persons were unemployed. At the same time, the share of the working-age population with a job (59 percent) remained at a depressed level, while the share of the population that was participating in the labor force decreased over the year, falling to 62.8 percent from 63.5 percent.
Last month, the unemployment rate was higher among adult male workers than female ones (5.7 percent versus 5.3 percent). Unemployment rates were higher among Black (10.7 percent) and Hispanic workers (7.8 percent) than among white ones (5.3 percent). The unemployment rate among teenagers was 21 percent.
Additionally, 5.4 percent of all veterans were unemployed in June, and the rate among recent veterans (served after September 2001) was 7 percent. At the same time, 12.9 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).
Jobs remained comparatively hard to find in June. Last month, the underemployment rate equaled 12.1 percent, down from the 14.2 percent rate logged a year ago. Among unemployed workers, 32.8 percent had been jobless for at least six months, as opposed to 36.9 percent a year earlier, and the average spell of unemployment equaled 33.5 weeks, down from 35.7 weeks in May 2013.
In June, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 51.2 percent of unemployed persons. Another 28.5 percent of unemployed persons were re-entrants to the labor market, while 11.2 percent were new entrants. Voluntary job leavers accounted for the remaining 9 percent of the total.
“The June employment report painted a portrait of a national job market that is showing improvements but remains far from healed,” observed Quinterno. “The magnitude of the problems stemming from the ‘Great Recession’ combined with the painfully prolonged recovery have obscured just how unusual current conditions are and have created a distorted picture of what a robust job market would look like.”