The economy added 195,000 jobs in June beating expectations of economists who predicted gains of 166,000. In spite of sequestration and other economic head winds, the economy continues to grow. The Bureau of Labor Statistics (BLS) released the figures Friday. The unemployment rate remained at 7.6%.
Over the past twelve months, the economy has averaged 182,000 new jobs per month.
In addition, the BLS revised previously released figures for April and May. The employment for April was revised upwards from the 149,000 previously reported to 199,000. April’s numbers were revised downward in May from 165,000 first reported. May’s figures were also revised upward to 195,000 from the 175,000 reported last month.
Government employment continues to decline
The private sector job growth was partially offset by the continual decline in the number of persons employed by the public sector. The federal government laid off 5,000 workers in June including 1,000 postal workers. In the last year a total of 65,000 federal employees have lost their jobs. The sequester and budget cuts by Congress are responsible.
This calls into question political hype about the federal government growing out of control. Since 2009, over 500,000 federal employees have lost their jobs. The reality is the federal government is shrinking, not growing.
State governments cut jobs in June as well. States terminated 15,000 workers, although 9,000 were teachers some of whom will be re-employed in the fall. 6,000 had jobs outside education. Budget cuts are responsible. The cuts by states were offset by gains in local government which added 15,000 employees.
What this shows is the continuing trend of shifting costs from the states to local governments. When Governors and state legislatures cut spending to balance their budgets, the needs still exist. Local taxpayers must pick up the cost. Politicians at the state level look like budget-cutting heroes, while local officials end up being the designated “bad guys” instead.
The report shows that construction jobs were up in June adding 13,000 jobs. Manufacturing, however, lost 6,000 workers after increasing employment last month.
Leisure and hospitality added 75,000 jobs in June. Monthly job growth in this industry has averaged 55,000 thus far in 2013, almost twice the average gain of 30,000 per month in 2012. Employment in food services and drinking places continued to expand, increasing by 52,000 in June. Employment in the amusements, gambling, and recreation industry also continued to trend up in June adding 19,000 workers. This growth is due to consumers spending again.
Employment in professional and business services rose by 53,000 in June. Employment continued to trend up in temporary help services which saw gains of 10,000. Over the past year, professional and business services have added 624,000 jobs. This is due to a trend by corporations to out-source rather than hire new employees. Employment in financial activities also rose by 17,000 in June.
Retail trade employment increased by 37,000 in June. Employment in wholesale trade continued to trend up adding 11,000 workers. Health care added jobs in June, with a gain of 20,000. This employment debunks predictions by some politicians that the advent of Obamacare would cause mass layoffs in the health care industry.
The bad news in the report is that despite job growth, the number of persons who have been employed long term, over 27 months, remains unchanged at 4.3 million or 36.7% of the unemployed. The number of long-term unemployed has declined by 1 million over the past year, however.
The number of persons employed part time increased by 322,000 in June due mostly to furloughs caused by the sequester. The number of discouraged workers–those who have given up looking for work, increased by 206,000 over last year. Most of these worked in jobs that went off shore.
Although job growth is not a good as it needs to be to drop the unemployment rate, it is still beating expectations. It shows the recovery is on track. What could throw ice water on this is the expected gridlock in congress this fall over raising the debt ceiling and passing a budget. We’ll take it while we can get it.
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