The U.S. economy added 83,000 private sector jobs in June, on the low end of what economists had been expecting, but evidence, nonetheless, that payrolls are continuing to grow.
The news was tempered by the loss of 225,000 temporary census jobs, and continuing cuts to state and local government payrolls, which resulted in a net loss of 125,000 jobs in June.
Even the decline in the unemployment rate to 9.5 percent from May’s 9.7 percent was tempered. Ordinarily good news, much of the reason for the decline appears to come from the fact that some of the unemployed had simply given up looking for work. The U.S. Bureau of Labor Statistics, which released the June employment report this morning, counts only people actively seeking in the previous four weeks as being unemployed.
Against the context of other economic news, including Thursday’s higher-than-expected numbers for first time unemployment claims, the BLS report shows an economy struggling to gain traction.
Since the beginning of the year, the private sector has added almost 600,000 jobs. To reduce the national unemployment rate by any significant amount, economists say 150,000 jobs a month will need to be created. That pace of hiring hasn’t been seen since the fall of 2007.
Still, there were indications that even though employers weren’t willing to commit, they continued to date, hiring another 21,000 temporary workers. It’s a sign that business is improving, at least enough to bring in additional workers.
On the other hand, the workweek decreased slightly for all private, non-farm workers by .1 hours to 34.1 hours. The manufacturing workweek declined by .5 hours to 40 hours even. It had risen in May by .4 hours. Hourly pay for private non-farm workers decreased by two cents to $22.53. It had been rising in all but one of the last 12 months.
The Dow Jones and other stock market indices seemed to have expected the news. Prices were flat to slightly up in the first minutes after trading began this morning.
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Donna Svei Jul 2, 2010 at 10:53 am
I was glad to see that the jobless rate for people with college degrees dropped from 4.7% in May to 4.4% in June. It looks as though a firm downward trend in joblessness for this group has been established: http://bit.ly/97iNXP.
Next Half of 2010: Same Old, Same Old - ERE.net Jul 6, 2010 at 5:44 pm
[...] matter, since consumer confidence is a matter of perception. And perception is reality. Friday’s Bureau of Labor Statistics report suggests that perception has enough of a grounding in reality that it lowered the unemployment rate [...]
Unemployment Rate Holds In July, But That’s All The Good News - ERE.net Aug 6, 2010 at 9:57 am
[...] Meanwhile, the BLS sharply revised its June employment report. Instead of the 125,000 job loss in the initial report, the government now says the economy lost 221,000. The private sector added only 31,000, a big difference from the 83,000. [...]
Keith Halperin Aug 6, 2010 at 12:07 pm
Economic Forecasts last updated: 07/29/2010
http://web.rollins.edu/~wseyfried/forecast.htm/
Recent Forecasts
Associated Press Survey (July 2010): economic growth in 2010 to be less than 3%; unemployment declines to 9.5% by end of 2010, doesn’t decline to 5% until at least 2015; Fed starts to raise rates in Spring 2011
Quarterly economic survey (USA Today – July 2010): economic growth = 2.5% in second half; unemployment = 9.5% at end of 2010; don’t recover jobs lost until at least 2014
OMB (July 23, 2010 – see p9): economic growth (end of year comparisons) = 3.1% in 2010, 4% in 2011; unemployment = 9.6% in 2010, 8.7% in 2011 (declines to 6% at the end of 2014); inflation = 1% in 2010, 1.6% in 2011; natural rate of unemployment = 5.2%, growth in potential GDP = 2.5%
Economic forecasting survey, July 2010 (WSJ): economic growth = 2.9% in 2010 (2.8% in second half), 3% in 2011; unemployment at 9.4% at end of 2010, 8.6% at end of 2011; inflation = 1.3% in 2010
Fed Forecast as of June 23, 2010: economic growth = 3% to 3.5% in 2010, 3.5-4.2% in 2011 and 3.5-4.5% in 2012 (note: these are from 4th quarter to 4th quarter while other forecasts compare yearly averages); unemployment rate = 9.2 to 9.5% in 2010, 8.3-8.7% in 2011 and 7.1-7.5% in 2012 (estimates are for 4th quarter of the respective year); natural rate of unemployment = 5 to 5.3% (range = 5 to 6.3%); inflation as measured by core PCE index of 0.8% to 1% in 2010, 0.9 to 1.3% in 2011 and 1 to 1.5% in 2012
Wells Fargo Securities Economic Forecast (latest forecast: July 2010): economic growth 3.2% in the second quarter of 2010, 1.6% in 3rd quarter, 2.2% in fourth quarter and 2.3% in 2011; core PCE inflation = 1.2% in 2010 and 1.6% in 2011; unemployment rate rises to 9.8% in the third quarter of 2010; declining to 9.4% in the fourth quarter of 2011 (sustained job growth of 100,000+ per month begins in fourth quarter); Fed begins to raise interest rates in 3rd quarter of 2011
Bloomberg (July 2010): economic growth = 2.8% from summer 2010 to summer 2011; economic growth = 2.9% in 2011; unemployment averages 9.6% in 2010 and 9.1% in 2011; core PCE inflation = 1.1% in 2010; Fed begins to raise rates in second quarter 2011 with the federal funds rate rising to 0.75% by summer 2011
IMF (July 2010): includes global forecasts; US economic growth = 3.3% in 2010, 2.9% in 2011
Morgan Stanley (July 2010): economic growth = 3.25% in second half of 2010
Univ. of Michigan Economic Forecast (executive summary – June 2010): economic growth = 2.7% in second half of 2010, 3% in 2011; core inflation (CPI) = 0.9% in 2010 and 1.2% in 2011; unemployment rate 9.7% in 2010 and 9% by end of 2011
ABA forecasting survey (June 2010 – WSJ): economic growth = 3.2% in 2010, 3% in 2011; unemployment rate declines to 8.5% by end of 2011; inflation remains low; Fed starts raising rates in 2011 (1.5% federal funds rate by end of 2011)
Livingston Survey (latest survey – June 2010): economic growth = 3.3% for the second half of 2010, 3% for the first half of 2011; unemployment rate = 9.5% in Dec 2010 and 9.1% in June 2011; inflation (CPI) = 1.8% for 2010 and 1.7% for 2011
OECD forecast: economic growth = 3.2% in 2010 and 2011; unemployment rate 9.6% by end of 2010, 8.4% by end of 2011, inflation =1.6% in 2010 and 1% in 2011
NABE consensus forecast: May 2010 (haver): economic growth = 3.2% in 2010 and 2011; unemployment = 9.6% by end of 2010 and 9% in 2011; ; core PCE inflation = 1.3% in 2010, 1.7% in 2011
Survey of Professional Forecasters (latest survey May 2010): economic growth = 3.3% in 2010, 3.1% in 2011, 3.2% in 2012; core inflation (PCE) = 1.2% in 2010, 1.6% in 2011 and 1.8% in 2012 (overall PCE inflation = 1.4% in 2010, 1.8% in 2011, 2% in 2012); unemployment rate = 9.5% in fourth quarter 2010; average unemployment rate = 8.9% in 2011, 8% in 2012
CBO (Jan 2010): note – assumes all Bush tax cuts expire and other policy changes that are unlikely (need to make forecast assuming current policy; results in weaker forecast); economic growth (end of year comparisons) = 2.1% in 2010, 2.4% in 2011; unemployment = 10% in fourth quarter 2010, 9.1% in 2011Q4, core PCE inflation = 1% in 2010, 0.9% in 2011; growth in potential GDP = 2.1% during next 5 years before rising to 2.4% from 2015-2020
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