U.S. Employment Numbers Suggest Smooth Sailing

Office conference with bar chart

It's the first Friday of the month. As is so often the case, the employment numbers for July are out from the U.S. Bureau of Labor Statistics. They show a reassuring return to the more or less steady course that had been underway before the massive downward lurch that befell us in May, during which hardly any job creation was reported.

 

That number was originally reported at a mere 11,000 jobs, but has been revised upward to a somewhat less mere 24,000 jobs in the latest employment situation summary. Likewise, June numbers also edged upward from a fairly healthy 287,000 to a slightly healthier 292,000.

 

Most labor economists believe that numbers of 300,000 or more per month are necessary to accommodate both new entrants to the work force and to help absorb the longer-term unemployed, including those either orphaned from, or underemployed in the workforce since, the disastrous downturn of 2008-2009. The numbers for July came in at 255,000 new jobs, which gives us two months in a row of more than 250,000 new jobs.

 

Looking back at 2015, seven of 12 months featured numbers greater than that, with average monthly job creation for the year settling in 229,000 jobs. So far, the average for 2016 is 186,000, even including the monumentally moribund May. Dropping May as an outlier, that average is 213,000 jobs for the other six months of 2016. You tell me: does that seem to indicate that May was an anomaly, or what?

 

Digging more deeply into the July numbers, it looks like growth is coming in only a few sectors of the overall economy at present. Jobs waxed in the professional and business services (+70,000), leisure and hospitality (+45,000), health care (+43,000), government (+38,000) and financial activities (+18,000) sectors.

 

As has been typical since September 2014, mining continues to edge downward. Roughly 220,000 jobs have been lost in mining since then (an average of 9,500 jobs per month); with only 6,000 mining jobs lost for June, the pace of attrition is slowing down. Other sectors remain mostly unchanged, including construction, manufacturing, wholesale and retail trades, plus our own home sector of information.

 

Sailboat on the seas

The general employment rate of 4.9 percent is unaltered; mostly ditto for the total number of unemployed persons at 7.8 million and the labor participation rate at 62.8 percent.

 

Table A-14, "Unemployed persons by industry and class of worker," shows some interesting figures for the Information industry. In July 2015, 115,000 unemployed set the unemployment rate for this sector at 4.1 percent. In July 2016, 149,000 unemployed translates into 5.7 percent. It's a little depressing to see information unemployment rates edging up ... because seeing them edge down would be a strong indicator of economic growth and improvement.

 

That said, workforce size for information for 2015 is the number of unemployed divided by the unemployment rate, or 2.8 million. For 2016, that number comes out to 2.6 million. This means that the size of the information industry has shrunk by 200,000 jobs over the past year, or about 7 percent. That's not a trend that I'd like to see continue for much longer (or at all).

 

Overall, though, the picture is one more of steady sailing on relatively smooth seas, rather than additional plunges into troughs like those from May of this year. Let's hope the economy can keep to this course, and our slow but steady growth continues.

 

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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.