By Dan Hamilton
The BLS' Employment Situation report for June was released Friday. Non-farm jobs and the unemployment rate both grew slightly. Jobs grew by 18,000, which on a base of 131 million jobs, is essentially the same as our forecast of 21,000. The unemployment rate was 9.2 percent, essentially the same as our forecast of 9.15 percent.
There were revisions to April and May jobs numbers, April’s jobs increase was revised down by 15,000 (from 232 to 217 thousand) and May’s jobs increase was revised down by 24,000 (from 54,000 to 25,000).
The long-term unemployment situation remains horrible. 6 million persons have remained unemployed for 27 weeks or more. If this does not indicate a structural problem in the labor market, what does it indicate? The broad measure of the unemployment rate, (which includes underemployed and marginally attached to labor force), is just over sixteen percent!
Private non-farm job growth has been less than 100 thousand per month, while public sector job losses have offset those gains, for two months in a row. I expect this pattern to continue. State and local governments cannot really hire because they must balance their budgets, or at least pretend to do so. The Federal government has come under lots of pressure to do something about their budget recently so they are not likely to boost hiring substantially in the near future.
This report obviously indicates a very weak job market. It is the second month in a row of essentially zero job growth and a rising unemployment rate. I am not bullish about the July’s report, which is due out Friday, August 5.