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  • Writer's pictureNick Andriacchi

Job Market Jumps In June

“Today there are more job openings than before the pandemic and fewer people in the labor force,” said Becky Frankiewicz, president of the staffing company ManpowerGroup North America. “The single defining challenge for employers is enticing American workers back to the work force.”


This about sums it up. And there plenty of incentives out there that will hopefully motivate people to re-enter the workforce. Rising wages, a plethora of jobs available, work-from-home flexibility, loosening government restrictions, ending enhanced UI benefits and plentiful vaccines are great incentives.


And according to the Wall Street Journal (June 27th), the number of unemployment-benefit recipients is falling at a faster rate in Missouri and 21 other states canceling enhanced and extended payments this month, suggesting that ending the aid could push more people to take jobs. The enhanced payments will end everywhere in September.





Analysis of the June Employment Report


· Employers added 850,000 in the month of June, beating economists’ expectations.


· Temporary help had a healthy increase adding 33,000 jobs in June. This may be attributed to the further loosening of restrictions and the 22 or so states that have ended or curtailed additional unemployment benefits


· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 9.8% from 10.2% in May.


· Previous months revisions were mixed. The change in total nonfarm payroll employment for April was revised down by 9,000, from +278,000 to +269,000, and the change for May was revised up by 24,000, from+559,000 to +583,000. With these revisions, employment in April and May combined is 15,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)


· Prime age labor force participation rate (ages 25-54) was up a healthy .4% this month at 81.7%. While the number has improved, it is still down by 1.2% since February 2020, the last month before the pandemic started.


· The overall labor force participation was little changed at 61.4%. This is 1.9% below last February (2020) level.


· Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $30.40 in June, following increases in May and April (+13 cents and +20 cents, respectively). Average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents to $25.68 in June. The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.


· The average workweek for all employees on private nonfarm payrolls decreased by .1 to 34.8 hours in June. In manufacturing, the average workweek fell by 0.2 hour to 40.2 hours, and overtime declined by 0.1 hour to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.2 hour to 34.1 hours.


· APD reported that 692,000 jobs were created in June


Source: ADP, BLS, CNBC, Wall Street Journal




JOLTS Report July 7, 2021


Job Openings


· On the last business day of May, the job openings level changed little at 9.2 million. The job openings rate was unchanged at 6.0 percent.

· Job openings increased in other services (+109,000), state and local government education (+46,000), and educational services (+35,000). The number of job openings decreased in arts, entertainment, and recreation (-80,000); state and local government, excluding education (-56,000); and federal government (-17,000). The number of job openings was little changed in all four regions.


Hires


· In May, the number and rate of hires changed little at 5.9 million and 4.1 percent, respectively. Hires decreased in state and local government, excluding education (-56,000) and in federal government (-10,000). The number of hires decreased in the Northeast region.


Separations


· Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.


· In May, the number and rate of total separations decreased to 5.3 million (-485,000) and 3.7 percent, respectively. The total separations level decreased in four industries, with the largest decreases in professional and business services (-192,000); transportation, warehousing, and utilities (-53,000); and state and local government education (-42,000). Total separations decreased in the South and West regions.


· In May, the quits level and rate decreased to 3.6 million and 2.5 percent, respectively. Quits decreased in a number of industries with the largest decreases in professional and business services (-181,000); transportation, warehousing, and utilities (-46,000); and durable goods manufacturing (-25,000). The number of quits decreased in the Northeast and South regions.


Net Change in Employment


· Over the 12 months ending in May, hires totaled 73.0 million and separations totaled 64.8 million, yielding a net employment gain of 8.2 million. These totals include workers who may have been hired and separated more than once during the year.


Source: BLS

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