Job Gains Total 223,000 in June, but Wages Still Flat

By Roy Maurer Jul 7, 2015
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U.S. employers added 223,000 jobs in June 2015, and the unemployment rate dipped to 5.3 percent, but wages remain stalled and labor participation fell near the lowest level since the late 1970s, according to the latest employment report released by the Bureau of Labor Statistics (BLS).

“The good news is that over 200,000 jobs were added in June and anything over the 200,000 threshold is generally considered a decent report,” said Jennifer Schramm, SHRM-SCP, manager of workforce trends at the Society for Human Resource Management (SHRM). “But the downside is that compared with an average monthly gain of 250,000 over the prior 12 months, and higher estimates among economists about what the numbers would look like going into this month, the report starts to look weaker,” she said.

Schramm, who manages the SHRM Leading Indicators of National Employment® (LINE) Report also pointed to the low labor force participation rate (62.6 percent), the problem of long-term unemployment for many jobseekers and flat average hourly earnings for private-sector workers.

Overall U.S. job gains are a drop from the 254,000 added in May 2015. Job gains occurred in professional and business services (+64,000), health care (+40,000), retail trade (+33,000), financial activities (+20,000), and in transportation and warehousing (+17,000).

Jobs in mining declined by 4,000. Employment in mining has declined by 71,000 since December 2014, with losses concentrated in support activities.

Temporary jobs increased by 19,800 in June, up from 17,200 in May.

The average workweek for all private-sector workers remained at 34.5 hours in June for the fourth consecutive month. Average hourly earnings for all employees on private payrolls dropped a cent to $24.95. Over the year, average hourly earnings have risen by 2.0 percent.

“We’ve seen some small incremental increases in our July LINE new-hire compensation index but so far it looks like this isn’t spreading across the workforce to any great degree,” said Schramm. “Keep in mind though that the June LINE report was also somewhat lackluster but improved again for the July expectations. So hopefully we will see things pick back up again when the July BLS numbers are in.”

Unemployment Rate Lowest Since 2008

The unemployment rate ticked down to 5.3 percent in June from 5.5 percent the previous month. The number of unemployed declined by 375,000 to 8.3 million.

Among workers the unemployment rates for adult men (4.8 percent), adult women (4.8 percent), and blacks (9.5 percent) edged down in June, while the rates for teenagers (18.1 percent), whites (4.6 percent), Asians (3.8 percent), and Hispanics (6.6 percent) showed little change.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by

381,000 to 2.1 million in June and accounted for 25.8 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 955,000.

Another important indicator of overall labor market health is the participation rate, which has been stuck on low for years. The labor force declined by 432,000 in June, following a similar increase in May. The labor force participation rate declined by 0.3 percentage point to 62.6 percent in June.

Individuals categorized as involuntary part-time workers—those seeking full-time employment, but working part time—dropped from 6.7 million to 6.5 million. Additionally, 1.9 million people were considered marginally attached to the labor force—unemployed, wanting and available for work, and had looked for a job sometime in the prior 12 months. Among this group, 653,000 individuals were considered discouraged—not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million people marginally attached to the labor force in June had not searched for work in the past month for reasons such as school attendance or family responsibilities, according to BLS.

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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