Huge Unexpected Boost in June Payrolls Report
Despite all the news of caution and concern, the Bureau of Labor Statistics (BLS) managed to show an upside blowout over expectations. The nonfarm payrolls rose by a sharp 287,000 in the month of June. Bloomberg was calling for only 180,000 and the Reuters estimate was 175,000.
Keep in mind is that May’s initial nonfarm payrolls was a dismal 38,000 in the report a month ago. That figure was also revised down to 11,000.
Private sector payrolls also rose more than expected to 265,000 in June. Reuters and Bloomberg both were calling for 170,000.
The official unemployment rate ticked higher to 4.9%, versus a 4.8% consensus by both Reuters and Bloomberg. This compared to a 4.7% unemployment rate in May.
Another uptick was seen in the labor force participation rate, up to 62.7% in June from 62.6% in May.
Average hourly earnings rose 0.1% in June after rising 0.2% in May, and the average hourly workweek was flat in June (versus May) at 34.4 hours.
In real dollar terms, wages were at an average of up two cents from the prior month at $25.61 per hour. That is up 2.6% from a year ago.
One consideration here is that the report’s sample week was from mid-June, so it did not really include the fallout from the Brexit news. Whether that really impacted U.S. companies and their hiring or firing remains up for debate because the stock market recaptured most of its post-Brexit losses.
Then there is the unofficial unemployment rate. This includes the unemployed and the underemployed, and it ticked down to 9.6% in the month of June from a reading of 9.7% in May.
The BLS broke down more specifics as follows:
Among the major worker groups, the unemployment rates for adult women (4.5 percent) and Whites (4.4 percent) rose in June. The rates for adult men (4.5 percent), teenagers (16.0 percent), Blacks (8.6 percent), Asians (3.5 percent), and Hispanics (5.8 percent) showed little or no change.
The number of persons unemployed less than 5 weeks increased by 211,000 in June, following a decrease in the prior month. At 2.0 million, the number of long-term unemployed (those jobless for 27 weeks or more) changed little in June and accounted for 25.8 percent of the unemployed.