June jobs report: the last hurrah of the wished-for “V-shaped” coronavirus recovery

June jobs report: the last hurrah of the wished-for “V-shaped” coronavirus recovery

HEADLINES:
  • 4,800,000 million jobs added. This makes up about 22% of the 22.1 million job losses in March and April.
  • U3 unemployment rate improved 2.2% from 13.3% to 11.1%, compared with the January low of 3.5%.
  • U6 underemployment rate improved 3.2% from 21.2% to 18.0%, compared with the January low of 6.9%.
  • Those on temporary layoff declined 4,778,000 to 10.565 million.
  • Permanent job losers increased by 588,000.
  • April was revised downward by -100,000. May was revised higher by 190,000 respectively, for a net of 90,000 more jobs gained compared with previous reports.

Leading employment indicators of a slowdown or recession

 

I am still highlighting these because of their leading nature for the economy overall.  These were uniformly very positive:

  • the average manufacturing workweek rose 0.5 hours from a downwardly revised 38.7 hours to 39.2 hours. This is one of the 10 components of the LEI and will be positive.
  • Manufacturing jobs rose by 356,000. Manufacturing has still lost 757,000  jobs in the past 4 months, or 6% of the total.
  • construction jobs rose by 158,000. Even so, in the past 4 months 472,000 construction jobs have been lost, or about 6% of the total.
  • Residential construction jobs, which are even more leading, rose by 19,100. Even so, in the past 4 months there have still been 45,900 lost jobs or about 5% of the total.
  • temporary jobs rose by 148,900. Since February, there have still been 696,100 jobs lost, or 24% of all temporary help jobs.
  • the number of people unemployed for 5 weeks or less declined by 1.037 million to 2.838 million, compared with April’s total of 14.283 million. This is similar to the “less awful” readings of the weekly initial jobless claims.
  • Professional and business employment rose by 306,000, which is still 1.830 million, or about 8% below its February peak.

Wages of non-managerial workers<

  • Average Hourly Earnings for Production and Nonsupervisory Personnel: declined $0.23 from $24.97 to $24.74, which is still a gain of over 2.6% in 4 months. This reflects that job losses were primarily among lower wage earners, who have been disproportionately recalled to work.

Aggregate hours and wages:

  • the index of aggregate hours worked for non-managerial workers rose by 4.2%. In the past 4 months combined this has nevertheless fallen by about 11%.
  •  the index of aggregate payrolls for non-managerial workers rose by 3.2%. In the past 4 months combined this has nevertheless fallen by about 8%.
Other significant data:
  • Full time jobs were responsible for 2.418 million of the gains.
  • Part time jobs were responsible for 2.438 million of the gains.
  • The number of job holders who were part time for economic reasons declined by 1,571 million to 9.062 million. This is still an increase since February of 4.744 million.

SUMMARY

The most important fact to know about this report is that it covers the payroll period from May 13 through June 12. During that time initial jobless claims continued to decline strongly, so it was no surprise that this jobs report included a strongly positive headline number.

With only one exception, all of the important internals were also positive. This was a reflection of a broad-based recall to work in many States that “reopened” their economies. Even the decline in average hourly wages was actually a positive, since it reflected lower paid workers being recalled to work.

The only negative was that the number of permanent job losses increased by over 1/2 million. This tells us that the underlying damage to the economy from the pandemic is spreading out and becoming more long-lasting.

Since June 12 both initial and continuing jobless claims have declined only slightly. More States that recklessly reopened are having to partially shut down businesses like restaurants and bars again. So this report – which shows a total recovery of about 1/3 of the job losses since February – is going to be one of the last hurrahs of the wished-for “V-shaped” recovery from the coronavirus lockdowns.

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