Friday, July 6, 2018

June jobs good. But sorry Rep. Grothman, they're no different than what we had before

Today was another “jobs Friday”, and it featured another good number.
Total nonfarm payroll employment increased by 213,000 in June and has grown by 2.4 million over the last 12 months. Over the month, job gains occurred in professional and business services, manufacturing, and health care, while employment in retail trade declined…

Manufacturing added 36,000 jobs in June. Durable goods manufacturing accounted for nearly all of the increase, including job gains in fabricated metal products (+7,000), computer and electronic products (+5,000), and primary metals (+3,000). Motor vehicles and parts also added jobs over the month (+12,000), after declining by 8,000 in May. Over the past year, manufacturing has added 285,000 jobs. Employment in health care rose by 25,000 in June and has increased by 309,000 over the year. Hospitals added 11,000 jobs over the month, and employment in ambulatory health care services continued to trend up (+14,000).

Construction employment continued to trend up in June (+13,000) and has increased by 282,000 over the year.
In addition, the prior 2 months had their job growth revised up by another 37,000, so that’s very good. Even the increase in the unemployment rate from 3.8% to 4.0% is for the “good reasons” – the household survey said that 102,000 more people were working, but there was a sizable increase in the seasonally-adjusted workforce in June that raised the rate.
In June, the civilian labor force grew by 601,000. The labor force participation rate edged up by 0.2 percentage point over the month to 62.9 percent but has shown no clear trend thus far this year.
This strong report led one vulnerable Wisconsin Congressman to try to claim that the GOP’s tax cuts that were passed into law at the end of 2016 really weren’t a scam, and instead was helping to grow the economy.

Sorry, Basement Boy, but you are stating facts that are not in evidence. I’m going to use the 3-month figures on job growth, since this would theoretically show increased job growth if the tax cuts were doing what Grothman claims.

What we see that job growth is no different than it was at the end of last year. And it really isn’t any different than what we had at the end of the Obama presidency.

And the other thing we’d be seeing if the GOP’s Tax Scam trickle-down theory was actually being successful would be that wages would be increasing. That’s not happening either, as the growth in average hourly wages remains tepid.
In June, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.98. Over the year, average hourly earnings have increased by 72 cents, or 2.7 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $22.62 in June.
That 2.7% wage increase is no different than it was when the tax cuts were passed last December, and no different than Obama’s last month in office, in December 2016. But what is different is the level of inflation, which is nearly twice what it was when Trump took office 18 months ago.

Lastly, what’s interesting about Grothman’s propping up of this latest jobs report is that it also illustrates the failure of the ALEC-backed tax cuts and austerity that the guy with the “TAXCUTR” license plate signed off on from 2011-2015. With those higher revisions, the Walker jobs gap is now close to 150,000 as of May. And nearly 20,000 jobs in that gap happened in April and May alone.

Don’t get me wrong. The job market and economy continued to grow in June 2018, and things seem to be in good shape as the quarter ends. But the same bugaboo of low wages lurks over this growth, and the effects of our trade war are going to be seen and felt starting in this month of July. So the prospects for the last half of 2018 are a little murkier than the otherwise bright employment picture would indicate.

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