June Unemployment Shows an Economy that is Standing Still
This is discouraging because we were hoping for a sign that the current downturn is a temporary bump on the road, rather than a lingering trend.
The number of jobs created in June was almost identical to those created in May; 80,000 and 77,000 correspondingly. Government austerity measures subtracted fewer jobs in June than in May, 4000 verses 28,000 respectively.
While overall unemployment was unchanged, among racial groups black unemployment increased significantly from 13.6% to 14.4%.
Unemployment among whites and Hispanics remain the same at 7.4% and 11% respectively.
The industry where most jobs were created was temporary help services, 25,200. This was followed by durable goods, 14,000 and by leisure and hospitality, 13,000.
Notably, only 2000 jobs were created within the construction industry.
One final disappointment was the increase in the size of the labor market; it increased by only 156,000, after increasing by 642,000 workers last month.
When large numbers of workers come into the labor market, it signals that they are more optimistic about finding a job.
What is the problem?
- The German compromise in the euro zone has not restored global confidence.
- US Consumer confidence is declining and durable goods purchasing is slowing.
- Government austerity measures are hurting growth.
- Low interest rates have lost their potency to stimulate growth.
Total Jobs Created: 80,000 in June and 77,000 in May. In June, the government sector subtracted 4,000 jobs.
Racial Unemployment Rates: Unemployment among blacks increased significantly.
Whites: 7.4% in June, 7.4% in May
Blacks: 14.4% in June, 13.6% in May
Latinos: 11.0% in June, 11.0% in May
Industries Where Jobs Were Created:
Note that only 2,000 jobs were created in construction, the industry that accounted for one-third of all workers who were displaced by the recession.
Temporary Help Services, 25,200
Durable goods, 14,000
Leisure and hospitality, 13,000
Other notable developments:
- The labor force did not grow by much over the month, (156,000). In May it increased by 642,000.
- Long-term unemployment declined slightly, (-41,000), last month it increased by 310,000.
- Between May and June, consumer sentiment decreased from 79.3 to 73.2.
- Auto and truck sales, the strongest sector of the economic recovery, fell from 14.4 to 13.7 million units.
- First time claims for unemployment insurance were lower than expected, (374,000). This means fewer layoffs are occurring.
- Residential construction increased more than expected, from 1.6% to 2.9%.
- Oil prices continued to decline, currently $79.40 a barrel after averaging $95.00 over the last year.