U.S. Jobs: Still Growing Strong with June Numbers In
There’s been a lot of difficult economic news in the past month. Inflation continues upward at more than 8 percent. Global stock markets are down by 10-to-20 percent. The conflict in Ukraine drags on and on. Against this dark backdrop, the U.S. job market continues to grow and unemployment has held steady at 3.6 percent for four months now, a near-historic low.
Both the Washington Post and the Wall Street Journal stress in their observations that, setting other economic indicators and external pressures aside, the U.S. job market is not behaving like one in the grips of recession. Rather, it continues to show strong signs of growth. In fact, it’s a ray of sunshine amidst an otherwise gloomy landscape.
Digging into the Employment Situation Summary
This month’s report from the Bureau of Labor Statistics is, as usual, the ultimate source of truth for the latest jobs market snapshot. Overall unemployment is closing in on pre-pandemic levels, down by just over 0.5 million jobs vis-à-vis February 2020. At the current rate of job growth, we’re somewhere between 1 and 1.5 months away from achieving parity.
In fact, the report observes that: "Private sector employment has recovered the net job losses due to the pandemic and is 140,000 higher than in February 2020, while government employment is 664,000 lower."
Here are the job numbers by sector for June, summarized from the aforelinked report:
Professional and business services added 74,000 jobs, with 12,000 of that total in management of companies and enterprises, 10,000 in computer systems design and related services, 8,000 in office admin services, and another 6,000 in scientific R&D services. Overall, this sector is 880,000 jobs ahead of February 2020 levels.
Leisure and hospitality added 67,000 jobs, with 41,000 in food services and drinking places. That said, this sector remains down by 1.3 million jobs (7.8 percent) relative to February 2020.
Healthcare added 57,000 jobs, with 28,000 in ambulatory healthcare services, 21,000 in hospitals, and 8,000 in nursing and residential care facilities. This sector is down by 176,000 jobs (1.1 percent) compared to February 2020.
Transportation and warehousing grew by 36,000 jobs, of which 18,000 went to warehousing and storage, and 8,000 to air transport. Employment in this sector is 759,000 ahead of February 2022 levels.
Manufacturing jobs increased by 39,000 jobs. It is on par with February 2020 levels.
Our home sector of Information added 25,000 jobs in June, after a long run of nearly flat employment, including 9,000 jobs in publishing industries not Internet-related. This sector is slightly ahead (by 105,000 jobs) of February 2020 levels.
Social assistance added 21,000 jobs, with 11,000 of those jobs in child day care services, and another 10,000 in individual and family services. This sector remains down by 87,000 jobs (2.0 percent) relative to February 2020.
Wholesale trade added 16,000 jobs, including 8,000 in nondurable goods. Employment in this sector is down slightly, by 18,000 jobs (0.3 percent) compared to February 2020.
Mining employment grew by 5,000 jobs, with 2,000 of that growth in oil and gas extraction. This sector is up by 86,000 jobs compared to its most recent low point in February 2021.
Other sectors were mostly flat, including Construction, Retail trade, Financial activities, Other services, and Government.
As you’d expect with inflation ongoing and ascendant, average hourly wages increased by 10 cents (0.3 percent) to $32.08. Wage growth still trails inflation, though, at 5.1 percent over the past 12 months (compared to estimates of 8.3 to 8.8 percent for June).
Reading a Muddled Mix of Tea Leaves
Given lots of negative economic news in light of this latest and positive jobs report, what do the pundits say? Mostly, they say this continued growth indicates that a recession is not currently underway. No one’s willing to say — including me — that it’s not a definite possibility. But it apparently hasn’t hit the job market yet.
Republicans eyeing the upcoming midterm elections decry the current administration’s abject failure to curb inflation, while Democrats point to continuing and historic levels of job growth and low unemployment rates. The Post goes so far as to quote Kevin Brady (a Republican from Texas) who references “President Biden’s cruel economy punctuated by slow growth.”
While Democrats counter with the speed, breadth, and depth of job market recovery, inflation (largely in the guise of outsized fuel costs) weighs heavily on voters of all persuasions.
Looking purely at the job market, we see that even those sectors (setting aside the leisure and hospitality sector) that remain behind February 2020 levels are not cripplingly far behind those levels. We also see some sectors — most notably, professional and business services and transportation and warehousing — about as far ahead of pre-pandemic levels as leisure and hospitality trails behind.
To some extent, I see this reflecting changes in the economy wrought by the pandemic (especially transportation and warehousing, as more people than ever shop from home at increasing levels). But overall, I find this news to be entirely cheerful, and reflective of an ongoing and still-strong labor market recovery.
There’s no doubt some rough sailing ahead, but so far this ship is sailing “steady as she goes” despite the impacts of inflation, market corrections, and global conflict. Let’s hope it keeps on course in the months ahead.