In the latest snapshot of the U.S. economy and after a disappointing report for May, government data out Friday indicated that June bounced back strong by adding 224,000 total nonfarm jobs.
Economists forecasted the addition of 160,000 jobs for June, citing fears of trade tension and cooling global growth as influencing factors for their prediction. With the strength of June’s release, prior month’s uncertainties have lessened and indication that the US economy is still healthy from job creation. The economy is now averaging 171,000 job creations per month and although this is the 105th consecutive month for positive job gains, the pace at which jobs are added has decelerated from the 223,000 per month average from 2018.
Professional and Business Services led all industries with 51,000 jobs added in the month of June. Comparatively, employment in Health Care increased by 35,000 jobs.
The labor force participation rate shifted upwards from 62.8 percent to 62.9 percent, showing that there are a few more people willing to join the labor force. This will continue to have an impact on companies as they try to land workers in a tight labor market.
“There’s lots of talk about uncertainty, and maybe that is going to lend itself to a weakening in hiring, but we haven’t actually seen it happen yet,” said Michelle Meyer, chief economist at Bank of America Merrill Lynch.
Overall, the unemployment rate saw a slight increase from 3.6 to 3.7 percent, but remains the lowest it has been in nearly 50 years.
Average earnings for all employees on private, nonfarm payrolls rose by 6 cents to $27.90 while the average workweek remained unchanged at 34.4 hours per week. Over the past 12 months, the average hourly earnings have increased by 3.1 percent.
ThinkWhy™ It Matters:
The rebound in job gains this month shows that the economy continues to grow. The unemployment rate remains at historically low levels and wage gains continue to climb. There are currently more job openings than unemployed persons in the economy, indicating companies need more employees to fuel growth.
In this economic condition, companies should prepare for the following:
• The pressure to hire less skilled labor to fill key roles
• Increased investment in training, skill enhancement, and outsourcing
• Higher wages on initial salary and benefit offers to attract talent
• Greater investment in automation of workflows
• Emphasis on employee engagement and retention