June Employment Report Strong

WASHINGTON (MNI) - The June employment report was strong and the only criticisms of the data might be that many jobs are being created in weaker industries like resorts, and that as jobs are created more people are edging back into the labor force, creating a stalling in the unemployment rate.

June payrolls were up 195,000 and April-May jobs revisions totaled +70,000. The average pace of job gains is now +182,000 a month over the trailing year -- a pretty decent pace consistent with a +2% economy that is being fueled by hiring as productivity stalls.

The June unemployment rate was still high at 7.6%, as participation and the number in the labor force moved up. This is a typical reaction to a better jobs picture, but we'd not read too much into a June report that is roiled by layoffs in education and new graduates entering the labor force.

Hours and earnings jumped, indicating incomes and production should gain in upcoming reports. Interestingly, most of the otherwise broad-based wage gain appears to be in bonus income for salary workers as production pay was up at a lesser pace. For all workers, AHE was up 10 cents, the best gain since 2008, for +2.2% over the year.

The main criticism remains that weaker jobs are being created - in restaurants, amusements, and retail. Manufacturing jobs are steady and construction jobs are merely edging higher.

June jobs composition included: manufacturing -6,000, construction +13,000, finance +17,000, healthcare +19,800, temporary help +9,500, retail +37,100, restaurants +51,700, and amusements +18,900. Government was -7,000, with about a 425,000 boost from the seasonal adjustment factor masking school layoffs, and with federal jobs -5,000 and local education -1,400 after adjustment.

Bottom line: a strong report that portends further economic growth.

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