So much for that terrible May jobs report: one month after the BLS reported the worst jobs report since 2010, moments ago the BLS reported that in June jobs increased by a whopping 287K, above not only the 180K consensus, but also well above the highest estimate, the highest increase since the 295K reported in October 2015, despite a downward revision to last month’s 38K which is now up 11K.
The change in total nonfarm payroll employment for April was revised from +123,000 to +144,000, and the change for May was revised from +38,000 to +11,000. With these revisions, employment gains in April and May combined were 6,000 less, on net, than previously reported. Over the past 3 months, job gains have averaged 147,000 per month.
This payrolls print is a 4 standard deviation beat and well above even the highest economist estimate…
Curiously, while the Establishment survey was a blowout, according to the Household Survey, the number of unemployed actually soared by 347K to 7.783MM which meant that the unemployment rate jumped from 4.7% to 4.9%, while the number of employed rose by just 37K, indicating a substantial divergence between the Household and Establishment Surveys.
The number of persons employed part time for economic reasons, or involuntary part-time workers, decreased by 587,000 to 5.8 million in June, offsetting an increase in May. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.
Also according to the household survey, there were 151.1MM people employed in June, an increase of 1.6% from a month ago.
As a result of the latest changes in the labor force, where the number of people not in the labor force declined by 191K, the participation rate rose modestly from 62.6% to 62.7%.
Additionally, while consensus had expected average hourly earnings to rise by 0.2% in June, wages managed only a 0.1% increase as most of the jobs added remained of very low quality, keeping the annual rate of increase at 2.6%, below the expected 2.7%.
More details from the full report:
Total nonfarm payroll employment increased by 287,000 in June, after changing little in May (+11,000). In June, job growth occurred in leisure and hospitality, health care and social assistance, and financial activities. Employment also rose in information, largely reflecting the return of workers from a strike. (See table B-1.)
Leisure and hospitality added 59,000 jobs in June, following little employment change in the prior month. In June, employment increased in performing arts and spectator sports (+14,000), after edging down in May. Employment in food services and drinking places changed little over the month (+22,000). Job gains in leisure and hospitality have averaged 27,000 per month thus far this year, down from an average of 37,000 in 2015, reflecting slower job growth in food services and drinking places.
Health care and social assistance added 58,000 jobs in June. Health care employment increased by 39,000 over the month. Job gains occurred in ambulatory health care services (+19,000) and hospitals (+15,000), about in line with average monthly gains over the prior 12 months in each industry. Within social assistance, child day care services added 15,000 jobs in June.
Employment in financial activities rose by 16,000 in June and has risen by 163,000 over the year.
Employment in information increased by 44,000 in June. Employment rose in telecommuni-cations (+28,000), largely reflecting the return of workers from a strike. Employment increased in motion picture and sound recording industries (+11,000), after a decrease of similar magnitude in May.
Employment in professional and business services continued to trend up in June (+38,000).Thus far this year, the industry has added an average of 30,000 jobs per month, compared with an average monthly gain of 52,000 in 2015.
Employment in retail trade edged up by 30,000 in June, after changing little over the prior 2 months. In June, job gains occurred in general merchandise stores (+9,000) and in health and personal care stores (+5,000). Retail trade has added 313,000 jobs over the year.
Employment in mining continued to trend down in June (-6,000). Since reaching a peak in September 2014, mining has lost 211,000 jobs.
Employment in other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, and government, showed little or no change in June.
In June, the average workweek for all employees on private nonfarm payrolls was 34.4 hours for the fifth consecutive month. The manufacturing workweek (40.7 hours) and manufacturing overtime (3.3 hours) were also unchanged over the month. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See tables B-2 and B-7.)
In June, average hourly earnings for all employees on private nonfarm payrolls edged up (+2 cents) to $25.61, following a 6-cent increase in May. Over the year, average hourly earnings have risen by 2.6 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.51 in June. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for April was revised from +123,000 to +144,000, and the change for May was revised from +38,000 to +11,000. With these revisions, employment gains in April and May combined were 6,000 less, on net, than previously reported. Over the past 3 months, job gains have averaged 147,000 per month.
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