The Labor Market Situation in June

Office of Economic PolicyJuly 7, 2014

Dr. Jennifer HuntDeputy Assistant Secretary, Microeconomic

Analysis

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Private sector employment up 262,000This is the fifth consecutive month of at least 200,000 jobs

1-month change, in thousands• June 2014

262• May 2014

224• April 2014

27812-month change, in thousands

• June 2013 to 2014:

2,439• Average:

262

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Steady growth in 3 month moving average

This has been the highest job growth in the first half of a year since 1999.

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Employment growth by super-sector this month

0.3%

0.3%

0.3%

0.2%

0.1%

0.2%

0.4%

0.1%

0.3%

0.3%

0.1%

0.4%

0.0%

-0.1%-6

0

4

6

9

15

16

17

17

26

38

39

40

67

-10 0 10 20 30 40 50 60 70 80

Other Services

Utilities

Mining and Logging

Construction

Information

Wholesale Trade*

Manufacturing

Transportation and Warehousing*

Financial Activities*

Government

Education and Health Services*

Leisure and Hospitality

Retail Trade*

Professional and Business Services*

Over-the-month employment change, June 2013, seasonally adjusted, in thousands

Source: Bureau of Labor Statistics, Current Employment Statistics, bls.gov/ces*denotes significance

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Unemployment rate fell significantly

June 2014 6.1%

May 2014 6.3%

April 2014 6.3%

June 2013 7.5%

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Long-term unemployment rate fell, remains double pre-recession average

June 2014: 2.0%

May 2014: 2.2%

April 2014: 2.2%

June 2013: 2.8%

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Employment rate ticked up

June 2014: 59.0%

May 2014: 58.9%

April 2014: 58.9%

June 2013: 58.7%

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LFPR same for third consecutive month

June 2014: 62.8%

May 2014: 62.8%

April 2014: 62.8%

June 2013: 63.4%

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Broader measures of unemployment falling – U6 back to 1994 level (but not to 2003, unlike U3)

Over-the-monthOver-the-yearchange

change• U1 ↓ 0.2

↓1.1pp • U2 ↓ 0.1

↓0.8pp • U3 ↓ 0.2

↓1.4pp • U4 ↓ 0.2

↓1.6pp • U5 ↓ 0.3

↓1.7pp • U6 ↓ 0.1

↓2.1pp

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Blemish: employment growth all part-time (CPS)

Part-time employment rose 799,000– Statistically significant– Part-time for economic reasons was one third of increase

Full-time employment fell 523,000 – Statistically insignificant

(Discrepancy CPS vs CES; and separate seasonal adjustment)

Some of part-time and government increase may have been extended school year due to snow days

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Strong report

Unemployment rate fell, thanks to employment rate rise

Employment growth broad-based across sectors

Blemish: growth was in part-time– Of which 1/3 part-time for economic reasons

Need more months like this

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For the 49th time in 50 months, more jobseekers gave up looking than found work.

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Long-term unemployed are increasingly more likely to leave the labor force than find employment

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Low household formation is holding back housing market

Thank you!

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Employment growth by super-sector peak to trough

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Two employment surveys: CES & Payroll-concept-adjusted CPS

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Not in Labor Force+111,000

Employed+407,000

Unemployed-325,000

Not in Labor Force85,522,000

Employed140,002,000

Unemployed5,294,000

Flows into employment increased, but more unemployed left the labor force than found jobs

1,88

6,00

0 3,895,000

2,15

1,00

0 4,017,000

2,352,000

2,274,000

net other +18,000 net other +155,000

net other +19,000