U.S. labor market adds 223,000 jobs in June; unemployment rate drops to 5.3 percent
The U.S. added 223,000 new jobs in June, marking the third consecutive month of solid gains after a winter slowdown reported in March. The June unemployment rate declined to 5.3 percent, the lowest rate since April 2008, which was largely a result of the labor force shrinking by more than 400,000 workers. In fact, labor force participation slipped to 62.6 percent in June, a 38-year low.
Meanwhile, April job gains were revised downward from +221,000 to +187,000, and May job gains were revised downward as well, from +280,000 to +254,000, meaning combined gains were 60,000 fewer than previously reported.
In June, employment numbers increased within professional and business services (+64,000), healthcare (+40,000), retail trade (+33,000), financial activities (+20,000) and transportation and warehousing (+17,000).
Randstad's U.S. Employee Confidence Index (ECI)
Dropping from its all-time high of 62.3 in Q1’15, Randstad’s U.S. Employee Confidence Index decreased slightly to 61.9 in Q2’15. However, the index remains well above its 59.0 reading in Q4’14. More than half of employed workers (53%) say they are confident in their ability to find a new job, a positive economic indicator.
U.S. Job Gains
The U.S. created 223,000 new jobs in June, while employment gains for May and April were revised downward by a total of 60,000 jobs. The economy has produced at least 200,000 jobs in 13 of the last 15 months—however, the U.S. has averaged 208,000 new jobs a month since the beginning of 2015, down from 260,000 per month in 2014.
U.S. Unemployment Rate
The unemployment rate decreased to 5.3 percent in June, the lowest level since April 2008. However, a closer look reveals the decreased unemployment rate is largely due to a reduction in the size of labor force (-400,000).
U.S. Unemployment Rate by Industry
In June, the majority of employment gains were created by businesses employing higher-skilled, professional workers. Employment increased within professional and business services (+64,000), healthcare (+40,000), retail trade (+33,000), financial activities (+20,000) and transportation and warehousing (+17,000). Over the past year, the retail trade sector has added roughly 300,000 positions to boost overall employment to a record 15.7 million.
Temporary Help Services Sector
Temporary help services continued to trend upward, adding almost 20,000 jobs in June and bringing the total number of temporary help services jobs to 2,914,700. The sector’s market share jumped to 2.05 percent in June, a rise from May’s 2.04 percent.
Average Weekly Earnings
Despite an increased number of jobs in June, average hourly wages remained flat at $24.95. Average hourly earnings have risen by 2.0 percent over the year.
Although June gains weren’t as high as some economists had anticipated, the U.S. labor market continues to trend upward. Since the beginning of 2015, the U.S. has added an average of 208,000 new jobs per month, with June marking the 13th of the last 15 months that the economy has produced at least 200,000 jobs per month. Additionally, the number of U.S. citizens out of work for at least six months fell by nearly 300,000 to 2.1 million. The long-term unemployed now account for 25.8 percent of all jobless U.S. citizens, down from 28.6 percent.