JUNE EMPLOYMENT SITUATION

The employment was bad news as payroll employment only rose by 18,000 as compared to the last months disappointing rise of 25,000. Government employment fell 39,000 versus 48,000 in
May. Private payrolls expanded only 57,000 that was even weaker than the prior months 73,000. Over the last two months payroll employment was essentially unchanged.


Moreover, the household survey reported an employment drop of -445,000. This lead to the unemployment rate rising to 9.2%


Historically the household survey tend to lead the payroll survey and the very poor performance of the household survey is extremely discouraging.


In addition the average workweek was unchanged so aggregate hours worked only expanded 0.1%

Over the last few months the index of hour worked has been:
………March……… April……… May…….. June
………100.5……… 100.7…….. 100.7 ….. 100.8
You would never know it from listening to the talking heads, but this recovery is actually stronger than the last recovery.


Average hourly earnings fell from $19.42 to $19.41. Both the year over year and compound three month growth rate of average hourly earnings is only 1.9%. Wage growth is approaching a record low.


Average wekly earnings growth also continues to slow. The year over gain is 2.5% and the three month growth rate is only 1.8%. Actually, with oil prices falling real weekly earnings ticked up month before last, the only gain in seven months. But this month average weekly earnings actually fell from $652.51 to $652.18 so unless we are experiencing deflation real wages will fall again this month. Given this weakness in wages and earnings it is extremely difficult to see where growth is going to come from.

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