June 2018 Employment Situation
Submitted by Atlas Indicators Investment Advisors on July 9th, 2018
Employment continues to be a highlight for the American economy. According to the Bureau of Labor Statistics, our country added 213,000 net new jobs during June 2018. This strong uptick followed May’s upwardly revised surge of 244,000 (originally 223,000) net new jobs. Despite the large monthly increase, the unemployment rate rose to 4.0 percent from 3.8 percent, but as you’ll see later, even that isn’t unwelcome news.
Hiring was strong in many sectors of the economy. Manufacturers added 36,000 jobs. Health-care payrolls were 25,000 greater in the period. Construction companies tacked on 13,000 workers and white-collar firms filled another 50,000 jobs. Retail was the lone loser in the period, shedding 22,000 jobs after an increase of 25,000 in May.
While gains were modest, even wages got in on the upward action. Hourly pay rose $0.05 to $26.98, an increase of roughly 0.2 percent. During the past year, the average hourly wage increased 2.7 percent, matching April’s twelve-month lookback.
Labor conditions were strong enough to bring a large number of new workers into the market. As mentioned earlier, the unemployment rate rose 0.2 percentage points in June, but that was largely due to an increase of 601,000 new participants in the workforce which caused the labor force participation rate to climb to 62.9 percent from 62.7 percent. Americans’ outlook for economic prosperity seems to be improving.
Most of the economic indicators Atlas writes about have positive tones, but employment is one of the strongest. Our economy just completed its 93rd straight month of job gains. Wages are improving but not at a pace which is likely to worry the Federal Reserve. At the risk of sounding too optimistic, America’s aggregate economy is in a favorable position.
