The June jobs report is out and unemployment is at its highest point since 2021 and the number of unemployed people is up by 162,000. The report reveals a significant cooling off in the labor market even as 206,000 jobs were added.
The Bureau of Labor Statistics (BLS) June labor report shows unemployment is at the highest level since November 2021 ticking up to 4.1%. BLS says the unemployment rate went up in part because 277,000 people started looking for a job in June, but not all found one.
Jobs gained from the April and May report were also sharply revised downward by 111,000 jobs. Wage growth is the weakest in three years with average hourly pay rising only 0.3% from May and just 3.9% from June 2023. With inflation for everyday goods such as housing, food, fuel, and energy still very high, average working Americans continue to spend more and more of every paycheck for basic needs.
Troubling trends in full versus part-time employment have also appeared in the past year. The US economy has added 1.8 million part-time jobs while 1.6 million full-time jobs have been lost. Americans who want to work full time and have the benefits that go with that are having a harder time. Juggling multiple part-time jobs has become a reality for many to make ends meet.
EJ Antoni, Ph. D. said on X, “ Full-time jobs are DOWN 1.6 million over the last year and part-time jobs are up 1.8 million - the economy is hemorrhaging full-time employment, and all the net job growth is gig work.”
“More than half of the 206k increase in payrolls in Jun was offset by downward revisions to Apr and May, meaning we're adding jobs we thought we already had; even still, the unprecedented divergence between payrolls and employment remains,” Antoni added on X.
A telling statistic in the BLS report is that just two employment sectors accounted for 75% of the job growth in June – government jobs and health care/social service jobs.
Neither of these types of jobs signifies economic strength. Hiring more people into the government on the backs of the taxpayer and hiring more people to service the poor doesn't grow a strong economy.
Job losses were most significant in the "temporary help services", manufacturing, and retail sectors. The category of "temporary help" is particularly noteworthy because economists use it as an indicator of future full-time hiring. When companies are growing, they often hire temporary workers until they can fill positions with full-time employees. Therefore, if companies lack a positive outlook and anticipate a challenging future, temporary workers are usually the first to be let go.
“The sharp decline in temporary help may portend future weakness in the labor market this summer,” Jack McIntyre, portfolio manager at Brandywine Global, said in a statement.
In an interesting connection of the jobs report to the national controversy of President Biden defying the Supreme Court decision nixing his student loan debt transfer plan, EJ Antoni, PH. D. pointed out on X that, “The employment level for college grads is up 4.9 million from pre-pandemic and this cohort returned to their pre-pandemic growth trend by the end of '21 - so, remind me why they deserve a student-loan bailout at the expense of everyone else?”
In a struggling economy and with a staggering national debt, it does raise the question as to why everyday Americans, who are already struggling to pay for basic needs, should also be forced to shoulder the debt of someone who has graduated from college and likely has a better income trajectory than they do.