Job Numbers Pop Back Into 'Normal Growth' Range

Job seekers parked on bench outside interview

The release of this morning's job figures for June from the US Bureau of Labor Statistics has been welcomed with a universal sigh of relief. After May's truly ghastly numbers, June's numbers shot back up into the kind of territory that tends to make labor economists grin.

 

The consensus forecast in advance of the report had been centered around 180,000 or thereabouts, so an actual report of 287,000 truly eclipses that forecast, and helps to dispel the idea that job growth had come to a screeching halt. At the same time, the unemployment rate increased from 4.7 to 4.9 percent. While that could be interpreted as a negative, it actually shows that more people who'd been sitting on the sidelines have once again started looking for work, and are thus now counted as among the unemployed rather than being out of the workforce altogether.

 

<p">This also brings the 3-month trailing average for job creation for April, May, and June to a somewhat respectable 147,000, and much closer to figures for the whole of 2015. 2.65M jobs were created in 2015, for an average of just over 220,000 jobs per month; the three month average for Mar, Apr, May of 2016 was only 116,000 as reported in June, but around 110,000 if using the corrected July figures.

 

Let's take a quick look at the sectors where this growth occurred. These include leisure and hospitality, health care and social assistance, and financial activities. Last month's dip in Information reflected a strike by Verizon workers that has now ended, so it returned to more normal levels.

 

Leisure and hospitality added 59,000 jobs, including performance arts and spectator sports (+14,000), food services and drinking places (+22,000). This was a banner month for this sector, which has averaged 27,000 jobs per month for 2016 (as compared to 37,000 per month in 2015).

 

Health care and social assistance added 58,000 jobs for June, of which 39,000 went to health care employment (+19,000 for ambulatory health care and +15,000 for hospital jobs), and 15,000 jobs for child day care services on the social assistance side of things.

 

Financial activities employment increased by +16,000 for June, as compared to a year-to-date monthly average of 27,000 jobs in that sector.

 

Information jobs increased by +44,000 for June, of which +28,000 was in telecomm (mostly returning Sprint strikers), but also +11,000 jobs were added in motion picture and sound recording, erasing a similar drop for May.

 

Job seeker circling ads in newspaper

Retail employment edged up by 30,000 for June following two months of low-growth/no-growth (the year-to-date average for monthly job creation in this sector is 52,000 jobs). Jobs in mining continue to decline (-6,000), while employment in other major sectors stayed flat (construction, manufacturing, whole trade, transportation and warehousing, and government).

 

Does this mean we're out of the woods, and on the home stretch to prosperity? Not exactly, because economists still insist that ongoing job creation over 300,000 per month is necessary to absorb new entrants to the workforce and to create intake positions for long-term unemployed and underemployed (those working part-time who'd rather be working full-time) persons.

 

However it is indisputable that the swing from May's +11,000 jobs created to June's +287,000 jobs created is a move very much in the right direction. It's also close enough to the magic 300K number to elicit the "labor economists' grin" I mentioned in the lead paragraph.

 

It's still a good idea to cultivate a wait and see attitude, but there's a lot more cause for optimism now in early July than there was in early June, that's for sure!

 

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About the Author

Ed Tittel is a 30-plus-year computer industry veteran who's worked as a software developer, technical marketer, consultant, author, and researcher. Author of many books and articles, Ed also writes on certification topics for Tech Target, ComputerWorld and Win10.Guru. Check out his website at www.edtittel.com, where he also blogs daily on Windows 10 and 11 topics.