The Labor Department released its June jobs report which shows 213,000 jobs added to the U.S. economy – continuing the longest stretch of job growth in the nation’s history. Increased participation in the labor market brought the unemployment rate up to 4.0 percent.
The Numbers
213,000: The economy added 213,000 jobs in June.
4.0%: The unemployment rate rose to 4.0 percent.
2.7%: Wages increased 2.7 percent over the last year.
The Good
The 213,000 jobs added in June beat analyst expectations. The rise in the unemployment rate by 0.2 percentage points is not bad news because it was caused by the increase in the workforce. Americans who have been sitting on the sidelines of the job market are being drawn in by the strong hiring environment.
Year over year job growth for many major sectors is impressive. In the last year, manufacturing has added 285,000 jobs; business and professional services increased by 521,000 jobs and employment in healthcare rose by 309,000.
The Bad
The tight labor market is having a negative impact on seasonal hires. The shortage of summer seasonal workers such as lifeguards is causing curtailing of services and higher wages, the cost of which may be passed onto consumers.
The U6, which is the unemployment measure that includes those too discouraged to look for work and workers in part-time jobs who want to work full-time, rose to 7.8 percent from 7.6 percent in May. The U-6 remains somewhat elevated compared to the last time unemployment was similarly low.
The Unknown
It is unclear how much the labor force can expand due to an aging population. With job openings continuing to increase, there is no clear path for how to attract those who have stayed outside the workforce in recent years.
While some hiring has been scaled back due to recently imposed tariffs and fears of a full-scale trade war, uncertainty remains regarding future commodity prices and inventory shortfalls which can have a profound effect on the nation’s economic health.
