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Employment Situation - June 2016


Employment Summary for
June 2016

U.S. job gains in June far surpassed economists' expectations, which were a bit conservative after a weak May report.

Job market rebounds

An impressive 287,000 jobs were added in June, far exceeding Bloomberg economists’ forecasts of 180,000 jobs added. Expectations were lower due to a surprisingly slow May, which saw only 38,000 jobs added, the lowest amount in nearly six years, according to Bloomberg.

The unexpectedly grim employment report in May had been disturbing enough to convince every voting member of the Federal Reserve’s policy-making committee last month to oppose any increase in its benchmark interest rate, noted the New York Times.  That jobs report, combined with Britain’s vote to leave the European Union, had fanned wider worries that the American economy was in danger of stalling, added the source.

While these concerns remain, the strong June gains point to a strengthening economy, despite a small increase in the unemployment rate, from 4.7 percent to 4.9 percent. This increase is partially due to more people entering the labor force, a sign of confidence in the jobs market. The New York Times noted that robust consumer spending, an improving service sector and manufacturing indexes and rock-bottom levels of new claims for unemployment benefits all point to fair weather for the national employment situation and the economy.

Average hourly earnings for private nonfarm payrolls increased during June, rising 2 cents to $25.61. Average hourly earnings for private-sector production and nonsupervisory employees rose 4 cents to reach $21.51.

In addition, the number of unfilled jobs continue to be at record levels, according to The New York Times. "During an economic downturn, the first place employers look to cut are unfilled jobs," said Andrew Chamberlain, chief economist at Glassdoor Economic Research, in an interview with the paper. "When I look through all the data, there is no smoking gun that the U.S. economy is pulling into a recession now."

Sector growth

Noteworthy in June was the news that the service sector index, backed by the Institute for Supply Management, increased to its highest level since November. The index grew from 52.9 in May to 56.5 in June, with the employment sub-index rising from 49.7 to 52.7, The Wall Street Journal reported.

Leisure and hospitality experienced the largest job growth in June, adding 59,000 jobs and posting an average job gain of 27,000 positions per month this year. Food services and drinking places employment added 22,000 jobs, a small change from the month prior.

Close behind leisure and hospitality was healthcare and social assistance, which added 58,000 jobs in June. Ambulatory healthcare services added 19,000 jobs while hospitals added 15,000 positions.

There was also significant growth in the information sector, which gained 44,000 jobs during the month. Telecommunications was boosted by 28,000 new jobs, which was related to the end of the Verizon strike and workers returning to their jobs.

Professional and business services added 38,000 jobs in June, while retail posted 30,000 positions. Financial activities gained 16,000 jobs in June, with the sector growing by 163,000 positions over the year.

Other industries such as construction, manufacturing, wholesale trade, and transportation and warehousing, were virtually unchanged in June.

The full Bureau of Labor Statistics report can be downloaded here:


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