Happy #JobsDay 📉📈.
Overall the labor market remains strong.
Fed rate hikes took it off boil, been cooling & now back near pre-pandemic levels. Cooling has taken the form of slower hiring & slower wage growth, not job destruction. Layoffs remain at record lows.
Here's the numbers...
How does recent growth compare to recent years? Economy added 2.61 million jobs over 12 months to June 2024.
That's faster growth than any year ending between 2016 and 2020, though down from recent years.
Job growth has been remarkably strong, especially given braking from Fed, slight deceleration recently:
+ 218K/mo over most-recent 12 months
+ 222K/mo over most-recent 6 months
+ 177K/mo over most-recent 3 months
+ 206K this past month
Contrary to popular impression, fiscal policy at all gov't levels is creating a DRAG on economic growth by -0.71 pp in annualized terms in 2024Q2, per Brookings.
The U.S. labor market remains strong despite braking by fiscal and monetary policy.
www.brookings.edu/articles/hut...
Turning from job growth to unemployment, the unemployment rate ticked up 0.1 percentage point (pp) to 4.1%, and the number of unemployed persons, at 6.8 million, changed little in June but each rose slightly.
This months breaks the streak of unemployment rates at or below 4.0%.
It extends the streak of unemployment rates at or below 4.1%, longest in a half century.
Labor force participation rate (LFPR) was 62.6%, partially reversing a 0.2 percentage point (pp) drop last month.
Boomer retirements push LFPR down about 0.2 pp/year, so June's LFPR, down just 0.4 pp from 5 years prior, is higher than expected based on June 2019’s level & demographic change alone.
Prime age (25-54 years old) employment share is an important measure of core labor market strength, omits people on the fringes of work, steady at 80.8% for 3 months now.
This is higher than any month since 2001, except it was 80.9% in July 2023.
A big spike in employees absent due to childcare problems, from 19K to 70K during June survey week.
This fell to pre-pandemic levels for the first time in May, so huge jump after decline (Figure).
Isn't seasonally adjusted but large May-June jump uncommon (Table).
Could be noise. Keep eye on it.
That’s the extensive quantity (Q) margin. Intensive Q margin is average hours.
Average workweek hours for private-sector steady at 34.3 hours for third month in a row.
This has normalized down a lot from earlier in the pandemic when employers worked staff longer, instead of hiring.
Hours among those who usually work full time remains a bit lower than pre-pandemic. Didn't fall further in June. Has ratcheted down in last 3 recessions.
Full time isn't as full as it used to be, which could be an increase in job quality for many salaried workers.
Across industries, except ag.
Fall in temporary help employment is scariest signal here. Easy to add when demand 🔼 & shrink when demand 🔽. Over-year fall is strong predictor of recession, been falling for a while.
Alternatively, temp agencies can't keep staff bcz employers forced to use more perm hires. That'd be a new pattern.
If employer demand for labor falls or new workers enter to supply, price (wage) should fall.
Private-sector wage growth decelerating in annualized over-the-month (3.5%), over-3-month (3.6%), & over-year (3.9%) rates.
Fed, bizs, & retirees want to push this down. Working families, not so much.
On average workers can afford more stuff per hour of work than a year ago; hourly wages grew faster than consumer prices, 3.9% vs 3.3%.
Caveat: rise, dip, & rise in 2020-2021 earnings mostly not real. Low-wage workers let go spring '20, wage of still-employed up. 2021 service hiring spike reversed
Last thing. BLS does amazing work to create timely, accurate info about America's working families, a huge public good.
They are there for us & we need to show up for them.
If you care about workers & employment, follow & join Friends of BLS.
www.friendsofbls.org/about-the-fr...
