We’re nearing the pivotal months of the Jobs Report. The forces of stimulus and the virus are both showing their wherewithal.
As a reminder the classification of jobs is weird. This may or may not have influenced the numbers. Furloughs and lay offs will get sorted out.
Keep in mind that March and April were unprecedented in terms of jobs loss. While the gains have been very impressive, we still have a long way to go. Usually job creation/destruction is cyclical or structural. Cyclical being normal recessions and recoveries. Structural being transitions such as away from agriculture or the employment of buggy whips when cars gained mass concentration. This feels like both.
Here are the job market and compensation numbers for June, 2020 (based on the job report):
Net gain of 4,800,000 jobs in the month (revisions show a gain of 2,700,000 in May after job losses of 20,800,000 in April, and 1,400,000 in March or a deficit of 14,700,000 jobs since February)
- Analysts expected an overall gain of 3,000,000
- Private sector payrolls increased by 2,370,000 (it was 128,362,000 in March, so a delta of 11,836,000 jobs)
- Private service producing industries gained 4,263,000 (it was a whole number of 107,276,000 in March. There is still a deficit of 10,636,000 jobs)
- Goods producing industries grew by 504,000 (it was a whole number of 21,086,000 in March. There is still a deficit of 1,200,000 workers from that period).
- May was revised to an increase of 2,700,000 from 2,500,000
- April was revised to a loss 20,800,000 from a revised number of 20,700,000 and an original reading of 20,500,000 loss jobs.
- Payroll processor ADP reported an employment gain of 2,369,000 jobs
- 1,900,000 people are considered long term unemployed (jobless for more than 6 months). It was 1,200,000 in May, 939,000 in April and 1,200,000 million people in March 2020
- Employers announced plans to cut 170,219 jobs in June. An improvement from the 397,016 announced cuts in May. It was a record in April, 671,129.
*Unemployment rate dropped to 11.1%. It was 13.3% in May and was 14.7% in April and 4.4% in March, 2020.
- The labor participation rate is 61.5%, up from 60.8% last month and 60.2% the month before. It was 62.7% in March, 2020
- The employment to population ratio is 54.6%. It was 52.8% last month and 51.3% in April. It was 60.0% in March, 2020
- The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), moved down to 18.0%. It was 21.2% last month and 22.8% in April. It was 8.7% in March.
- PMI, a measure of manufacturing pace, is 52.6% after declining months of 43.1% and 41.5%. Anything above 50% means and increase month over month in activity
- Service sector activity was 47.6 after seeing 37.5 in May. It was an all time low of 26.7 in April. Although an improvement, it still shows the service sector is shrinking.
Specific Segment Job numbers:
- Manufacturing increased by 356,000.
- Construction gained 158,000 jobs.
- Retailers improved by 740,000 jobs.
- Leisure and Hospitality Services gained 2,100,000 jobs. It had lost 7,700,000 jobs or 47% of the industry in April.
- Government sector increased by 33,000.
- Education and Health Services gained 568,000.
- Health Care gained 358,000 jobs.
- Professional and Business Services increased by 306,000.
- A gain of 149,000 jobs in Temporary Help. This is often an indicator of improved economics.
Wage (can be revised):
- The average weekly paycheck (seasonally adjusted) is $1,013.27.
- The average hourly earnings (seasonally adjusted) is $29.37.
- Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 33.9.
Working Thoughts 