June Employment Situation Report Shows Stronger Labor Market Than Anticipated

The U.S. labor market continues to show better-than-expected resiliency despite the triple whammy of tax increases, huge federal spending reductions and a recession in Europe. In June, companies added 195,000 jobs, according to the U.S. Department of Labor’s (DOL) Employment Situation News Release.

The gains exceed the 65,000 consensus projection made by economists. Another positive taken from the report, the DOL made upward revisions to data for April (from 149,000 to 199,000) and May (from 175,000 to 195,000).

Job data by industry

In June, the federal government lost 5,000 jobs. Over the last year, employment in the government sector has declined a total of 65,000 jobs. In contrast, over the last 12 months, nonfarm payroll employment has averaged a monthly gain of 182,000.

The follows sectors experienced job growth in June:

Leisure and hospitality: The 75,000 jobs added in June exceed the average of 55,000 positions per month this year. In 2012, the average job gain was 30,000 per month. Employment continues to expand in the sub-categories of food services and drinking establishments—growing by 52,000 in June. The recreation, amusements and gambling added 19,000 workers to their payrolls.

Professional and business services: Employers created 53,000, with 8,000 jobs in management and technical consulting. Positions in computer design and associated services rose by 7,000. Temporary help services added 10,000 workers. Year-over-year, the professional and business services industry has created 624,000 jobs.

Retail trade: Retail employers padded their payrolls by 37,000 last month. Build materials companies and garden supply centers added 9,000 new workers. Motor vehicle and parts establishments recorded an 8,000 increase. Wholesale trade continues earlier momentum with a gain of 11,000 new workers.

Health care: This sector continues to add to its payroll with 20,000 jobs gained in June. Ambulatory health care services registered 18,000 jobs. After cutting 8,000 jobs in May, hospitals added back 5,000 positions.

Financial activities: A total of 17,000 positions were created in June. Most of the gains came in the credit intermediation and insurance carrier sub-categories with 6,000 jobs each.

Most of the other major industries, such as construction, manufacturing, transportation, warehousing, mining and logging, remained unchanged in June.

Data by worker categories

The unemployment rate remained at 7.6 percent. The Employment Situation report also reveals that 11.8 million Americans are out of work. Each one of these metrics has not changed much since February.

Here are the figures by worker group:

• Adult men – 7.0 percent
• Adult women – 6.8 percent
• Teenagers – 24.0 percent
• Whites – 6.6 percent
• Blacks – 13.7 percent
• Hispanics  –  9.1 percent
• Asians  –  5.0 percent

The DOL data shows that the number of long-term unemployed workers—individuals who have been without work for at least 27 weeks—did not changed much with 4.3 million people. This works out to 36.7 percent of all unemployed workers. On a year-over-year basis, the number of long-term unemployed Americans has dropped by 1.0 million.

The number of people working part-time due to “economic reasons” or involuntary part-time workers rose by 322,000 in June. Based on the data, 8.2 million individuals fall under this group. These are workers who have been forced into a part-time status because their employers cut back work hours or they have been unable to find full-time-work.

Another important category of workers—described as individuals “marginally attached to the workforce”—remained unchanged from the same period in 2012 at 2.6 million persons.

This grouping consist of  people who were not in the labor force, but wanted work, was available to work and  searched for a job sometimes during the last 12 months, but not within the 4-week period before the DOL survey.

One million of the people in the marginally attached grouping are further categorized as discouraged workers. These persons have stopped actively looking for work because they believe “no jobs are available for them.”

Discourage workers have increased by 206,000 over June 2012. The other 1.6 million people under the marginally attached category did not search for jobs because of attending school or familial obligations.