Labor economists are expecting that June was another lackluster month when it comes to job creation, forecasting that the U.S. economy added barely 100,000 jobs. The official report from the U.S. Labor Department is slated to be released Friday morning.
If it turns out they’re right — and we’ll get a hint when ADP releases its report on private jobs Thursday — it will mean that for the third consecutive year, job creation has gone into a summer slump. Though better than May’s 69,000 jobs, the forecasts, which are nearly all in a range from 90,000 to 100,000, evidence a growing suspicion that little improvement in employment is likely any time soon.
“Clearly, the labor market is slowing and the other indicators that have come out since the last report have generally been on the softer side,” Srinivas Thiruvadanthai, an economist with the Jerome Levy Forecasting Center, was quoted as saying.
Paul Dales, a senior U.S. economist at Capital Economics Ltd. in London, told Bloomberg News, “The economy isn’t going to get exceptionally weak from here, but neither is it going to get much stronger.”
Bloomberg predicts that the June report will cap the weakest jobs quarter in two years. If the report comes in as expected, the U.S. will have added somewhere around 236,000 jobs from April through June. That’s well under half the 677,000 created in the first quarter of the year, and compares to the 389,000 in the second quarter last year.
The unemployment rate, which rose to 8.2 percent in May, is not expected to change. It’s already the longest period since 1948, when records were first kept, that unemployment has remained above 8 percent. Were it not for the fact that so many young Americans have simply given up looking for a job, the rate would be significantly higher, the International Business Times reported.
High unemployment and stagnant job creation are making consumer’s cautious, if not completely pessimistic. The Thomson Reuters/University of Michigan consumer sentiment index fell to its lowest level in six months last week. It’s now at 73.2, falling sharply from May’s 79.3. Likewise, the Conference Board’s Consumer Confidence Index fell in June and now is at 62.0, down nearly 10 points from its February high of 71.6.
The significance of a declining confidence is that worried consumers spend less, which ripples through the economy, causing slowdowns everywhere from your local retailer to manufacturers and shippers and all the service industries that support them. However, consumer confidence measures, like the jobs numbers, have also seen a summer slump, moving down nearly in tandem with the jobs numbers, then moving back up in the fall, as hiring has picked up.
With a presidential election ahead, it’s by no means certain that 2012 will exhibit the same kind of seasonal trend we’ve seen the last two years.However, the Conference Board’s count of online job ads showed a sharp increase in June, increasing by 232,000 advertised openings.
The Conference Board says there were 4.95 million jobs posted online during June.