The last two jobs’ reports confirm what people in the staffing industry have known for some time, the job market was/is not as strong as perceived to be. The topline number is one thing, but more concerning are the monthly downward revisions of jobs created and anemic wage growth this month.
I said this last month, but July’s report furthers the case that job growth is not keeping up with job demand. The gradual uptick in the U3 & U6 unemployment rates supports this statement.
Another item of concern in this report is wage growth. Wages were up just .2% this month or 2.4% annually. On the surface, that’s not a crazy low number, but considering that the average hours worked were lower last number, wages should have risen more.
Let me explain. Wage growth is calculated by using the following formula:
All employee payroll divided by All employee hours worked
Since the denominator (hours worked) was lower, wage growth should be a little higher (like in January 2024). But it wasn’t. If the average hours worked stayed the same as the month before (34.3), then average wages would have been $34.97 or TWO CENTS LOWER than in June.
· Nonfarm payrolls expanded by 114,000 for the month, way short of expectations.
· The unemployment rate rose to 4.%.
· Job gains were concentrated in health care, construction, and leisure and hospitality.
· Average hourly earnings slowed, rising 0.2% last month. Much more on this later.
For a deeper dive….
· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons jumped .4% to 7.8%.
· Prime age labor force participation rate (ages 25-54) was up .3% to 84.0%.
· The overall labor force participation rose .1% to 62.7%. This is still .5% below the level of February 2020.
· In July, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents, or 0.2 percent, to $35.07. Over the past 12 months, average hourly earnings have increased by 3.6 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees increased by 9 cents, or 0.3 percent, to $30.14.
· The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.2 hours in July. In manufacturing, the average workweek edged down by 0.2 hour to 39.9 hours, and overtime edged down by 0.1 hour to 2.8 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.7 hours.
· APD is reported that 122,000 jobs were added in July. 28,000 less than June.
Source: ADP, BLS, CNBC, Fox News
JOB OPENINGS AND LABOR TURNOVER – JUNE 2024
The number of job openings was unchanged at 8.2 million on the last business day of June, the U.S.
Bureau of Labor Statistics reported today. Over the month, both the number of hires and total separations were little changed at 5.3 million and 5.1 million, respectively. Within separations, quits (3.3 million) and layoffs and discharges (1.5 million) changed little. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class.
Job Openings
On the last business day of June, the number of job openings was unchanged at 8.2 million and was down by 941,000 over the year. The job openings rate held at 4.9 percent in June. Job openings increased in accommodation and food services (+120,000) and in state and local government, excluding education (+94,000). The number of job openings decreased in durable goods manufacturing (-88,000) and in federal government (-62,000).
Hires
The number of hires was little changed at 5.3 million in June but was down by 554,000 over the year.
The hires rate, at 3.4 percent, changed little in June.
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 include separations due to retirement, death, disability, and transfers to other locations of the same firm.
The number of total separations in June changed little at 5.1 million. This measure was down by 544,000 over the year. The total separations rate was little changed at 3.2 percent in June. Total separations decreased in state and local government education (-51,000) and in arts, entertainment, and recreation (-39,000).
In June, the number of quits was little changed at 3.3 million but was down by 434,000 over the year. The quits rate was unchanged at 2.1 percent in June. Quits decreased in construction (-64,000) and in state and local government education (-55,000).
In June, the number of layoffs and discharges changed little at 1.5 million, and the rate decreased to 0.9 percent. Layoffs and discharges decreased in finance and insurance (-26,000).
The number of other separations was little changed in June at 314,000.
Establishment Size Class
In June, for establishments with 1 to 9 employees, the job openings rate, hires rate, and total separations rate changed little. For establishments with 5,000 or more employees, the layoffs and discharges rate decreased, while the job openings rate and total separations rate changed little. The hires rate was unchanged.
May 2024 Revisions
The number of job openings for May was revised up by 90,000 to 8.2 million, the number of hires was revised down by 101,000 to 5.7 million, and the number of total separations was revised down by 25,000 to 5.4 million. Within separations, the number of quits was revised down by 56,000 to 3.4 million, and the number of layoffs and discharges was revised up by 24,000 to 1.7 million. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)
The Job Openings and Labor Turnover Survey estimates for July 2024 are scheduled to be released on Wednesday, September 4, 2024, at 10:00 a.m. (ET).
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