Parsing a mixed bag jobs report

The June US jobs report was good but not great.

The good news is that June’s monthly non-farm payroll growth of 223,000 again exceeded the 200,000 level that many consider to be important.

This has happened 13 out of the last 15 reports.

Below Expectations

While above the 200,000 level, the number failed to reach the generally expected 230,000 level.

Adding a little more disappointment were negative revisions to non-farm growth for both May (from 280,000 to 254,000) and April (from 221,000 to 187,000).

Areas experiencing greatest growth were professional and business services, healthcare and retail.

Mining, the area that includes energy jobs, fell again.

The last thing to note here about nonfarm payrolls is that 2015 YTD average monthly growth is 208,000 which less than 2014′s comparable growth at 260,000.

Jobless Rate

The other headline number, the unemployment rate, fell nicely from 5.5% to 5.3%, a 7-year low.

This was a bit better than expectations of 5.4% but once again had some quirky factors affecting the calculations.

One important factor that helped push the rate lower was the number of people who left the workforce which was calculated as 432,000.

New Graduates

Many are attributing the issue to new graduates where survey people are having a hard time figuring out if graduates are looking for work right away or not.

A look at people aged 25 to 54, prime working years, did see a labor participation rate decline from 81% to 80.8% so there does seem to be some level of legitimate concern for what the current 5.3% unemployment rate truly represents.


Other important items that disappointed were unchanged numbers in both average workweek hours (34.5) and hourly earnings ($24.95).

All said, this report is consistent with the tepid growth that has generally characterized the economy over the past few years.

This and foreign developments (Greece) are not making it easy for the Fed in its decision to start raising short-term rates.

Reactions from the market suggest that the timing of the move has been pushed out by this report.

Of note, there are two more employment reports before the Fed’s next meeting in September.

Photo Credit: Colin via Flickr Creative Commons


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