Good News Friday - July 6, 2012
The Bureau of Labor Statistics released its much-anticipated monthly employment report this morning. The results were less than inspiring, but the report does indicate that the labor market recovery remains intact despite prodigious headwinds emanating from Europe. The details:
· Employers added 80,000 net new payroll jobs in June, short of the +/- 100,000 expected by analysts. Revisions to April and May were insignificant – a net loss of 1,000.
· Most sectors were relatively flat last month with few posting large gains or losses. Professional and business services led with 47,000, of which more than half were temp jobs. Leisure and hospitality added 13,000 followed by 11,000 in manufacturing. Information, the largest loser, shed 8,000.
· Government jobs declined by a modest 4,000, meaning that private sector employment increased by 84,000, the lowest level since August 2011.
· A bright spot was the average hourly earnings for all private employees, surging by 0.3% last month compared with 0.1% in May. Falling inflation made that number look even better with real average hourly earnings up by 0.5%, the highest one-month gain since December 2008. Credit falling gasoline prices for the gain in real earnings. The 12-month increase of 2.0% in nominal earnings growth remained disappointing, however.
· The average workweek for all private employees ticked up a notch to 34.5 hours in June, but it remains lower than pre-recession data. Employers are making do with existing staff.
· The unemployment rate was unchanged at 8.2% in June. The civilian labor force and the number of respondents who said they had worked during the survey week both grew modestly, which kept the labor force participation rate near its historic low of 63.8%.
· The U-6 rate, which includes discouraged workers and part-time workers who want a full-time job, increased from 14.8 to 14.9%.
The sectors of the labor market most important to commercial real estate continued to expand last month but not as quickly as in May.
· The office-using sectors of professional and technical services, information, and finance together added 15,200 jobs in June versus a gain of 20,300 in May.
· The sectors of the economy most important for the industrial market – manufacturing, wholesale trade, and transportation and warehousing – added a combined 17,600 jobs in June, down sharply from the 55,800 jobs gained in May. This echoes the sharp downturn in the Institute for Supply Management's purchasing managers index released early this week.
· Retailers cut 5,400 positions last month compared with a gain of 2,100 in May.
· The leisure and hospitality sector added 13,000 positions last month versus a decline of 7,000 in May.
The labor market continues to expand but not as rapidly as anyone would like.
Have a great weekend.
SVP, Chief Economist
Grubb & Ellis