Saturday, July 8, 2017

June jobs good, but let's not go too crazy

While much of the national news may be focusing on what's going on in Germany, there was a US jobs report that came out yesterday. And the news was pretty good.
Total nonfarm payroll employment increased by 222,000 in June. Employment rose in health care, social assistance, financial activities, and mining. Employment growth has averaged 180,000 per month thus far this year, in line with the average monthly gain of 187,000 in 2016....

The change in total nonfarm payroll employment for April was revised up from +174,000 to +207,000, and the change for May was revised up from +138,000 to +152,000. With these revisions, employment gains in April and May combined were 47,000 more than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 194,000 per month.
That was above general expectations of around 180,000, and even the slight tick up in the unemployment rate from 4.29% to 4.35% wasn't that bad, as household employment (+245,000) and the labor force (+361,000) grew well. Overall, the jobs report reiterates that the economy continues to grow as the current expansion started its 9th year this month.

The biggest sector of the job market that saw increases were in health care and "individual and family" social assistance service, adding a combined 48,000 jobs in June. What makes those figures extra intriguing to me is that Trumpcare would cut Medicaid and other access to these services, which would likely reduce the growth of jobs in those industries. So are Trump and the GOPs going to continue to try to mess with something that's giving them good jobs numbers, along with a health care bill that's giving them bad poll numbers?

Trump also promoted "bringing back mining" as a key part of whatever economic strategy he might have. And on the topline, the Bureau of Labor Statistics says the"Mining" sector has added over 14,000 jobs in the last two months. But then you dig down into those figures, and you notice this oddity.

Mining jobs April 2017 - June 2017
"On-site" mining jobs -400
Support activities for mining +14,500

If the mining jobs aren't happening on site, doesn't it seem that those support activities would also dry up soon, especially with oil prices staying below $50 a barrel? Could be something to watch in the near future.

What the Trump Administration and most media didn't mention yesterday is the source of one of the other large increases in yesterday's jobs report - Local Government, which "added" 35,000 jobs due to lower-than-normal seasonal layoffs (158,000 layoffs, and over 377,000 in local education). This seems to be related to the survey date, which was in relatively early June, and that makes me wonder if that figure will "snap back" in July when more people are done working at schools and other local government outlets, and lead to a similar decline.

It also helps explain a lot of the "upside surprise" of June's 222,000 total job increase. Private sector jobs only went up by 187,000, which were basically in line with estimates, and isn't much different than the trend that we have seen over the last 12 months (an average of 175,000 a month). Slower than the more robust 200,000+-a-month pace we were on in the few years prior to 2016, but still solid and nothing that indicates recession is near.

Wage growth continues to be "meh", only up 4 cents an hour (0.18%) and 2.38% for the last year. Not much different than what we saw in June 2016 (in fact, slightly less), and the theory that claims "wage growth is right around the corner in this tight labor market" keeps being proven wrong. Wonder how much longer blue-collars are going to have patience with Trump to change their mediocre lot in life if that continues...unless it's some other reason that makes them like the guy (wink).

So overall, a good job report for June, but you can see where it isn't any kind of blowout report that would be part of an economic boom. So if it feels like "same old, same old" for the economy 6 months into the Trump presidency, you're probably correct to feel that way. Then again, that may be a good thing compared to the crap that might be happening if Trump really was getting his regressive, trickle-down agenda into law!

1 comment:

  1. With that household income number are we talking about a median household income boost or is that an average? I can't tell you how happy I would be to see my wages go up 2.4% per year.