The U.S. created just 80,000 jobs in June as hiring slowed dramatically in the second quarter, confirming that the economy has hit another rough patch.
The unemployment rate was unchanged at 8.2%, the Labor Department said Friday.
The disappointing employment report adds to fresh worries about the U.S. economy at a time when growth is slowing around the world and Washington is gridlocked about how to address the malaise. Economists surveyed by MarketWatch were expecting a net increase of 100,000 jobs in June.
Overall the June jobs report is pretty gloomy, there’s a couple of bright spots in that the overall work week edged slightly higher, to 34.5 hours and average hourly earnings increased 6 cents to $23.50 an hour, that’s about it though… the civilian labor force participation rate and the employment-population ratio were unchanged in June at 63.8 and 58.6 percent, as was the top line unemployment number (U3) which remained at 8.2%.
But as James Pethokoukis notes those numbers actually overstate the health of the labor market:
– If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7% then vs. 63.8% today—the U-3 unemployment rate would be 10.9%. Even if you take into account that the LFP should be declining as America ages, the unemployment rate would be 10.5%.
– The broader U-6 unemployment rate, which includes “all persons marginally attached to the labor force, plus total employed part time for economic reasons,” is 14.9%, up a bit from May.
– The average duration of unemployment ticked up to 39.9 weeks.
– It will take 219,000 net new jobs a month for unemployment rate to be below 8% on Election Day if current participation rate holds steady.
– Job growth during the three-year Obama recovery has averaged just 75,000 a month for a total of 2.7 million. During the first three years of the Reagan Recovery, job growth averaged 273,000 a month for a total of 9.8 million. If you adjust for the larger U.S. population today, the Reagan Recovery averaged 360,000 jobs a month for a three-year total of 13 million jobs.
Unemployment among African-Americans jumped to 14.4%, up from 13.6% last month.
Unemployment among Hispanics was unchanged, remaining at 11% in June after increasing in May from 10.3% in April.
None of the weakness in the labor market should come as a surprise to anyone, not when the US economy is limping along with barely 2% GDP growth… The economy just isn’t strong enough to create the kind of job growth we need.
Politically, this isn’t the kind of jobs report President Obama and his team needs or wants to see at this point. It’s now been 41 months of 8% or higher unemployment — the longest streak of 8 plus percent unemployment since the Great Depression. It’s worth noting the President’s team of economic advisers predicted — promised that if Congress passed President Obama’s $800 billion stimulus plan, the unemployment rate would be around 5.6% today.
I don’t see much of an upside for the President here, November is still a long way off and anything can happen between now and then, but I think it’s safe to say President Obama faces and uphill reelection fight at this point.
Edit: I forgot to mention the public sector only lost 4,000 jobs last month, so contrary to the Presidents claim the problem is not a lack of government jobs.
Update: Investors Business Daily notes a grim statistic:
More workers joined the federal government’s disability program in June than got new jobs, according to two new government reports, a clear indicator of how bleak the nation’s jobs picture is after three full years of economic recovery.
The economy created just 80,000 jobs in June, the Bureau of Labor Statistics reported Friday. But that same month, 85,000 workers left the workforce entirely to enroll in the Social Security Disability Insurance program, according to the Social Security Administration.
And President Obama says the June jobs report shows the economy has taken ”a step in the right direction.” Ouch, I’d call him delusional, but one shouldn’t say such things about the President of the United States.
- Payrolls in U.S. Rose 80,000 in June; Jobless Rate 8.2% – Bloomberg News
- June Job Creation at 80,000; Rate Holds Steady at 8.2% – CNBC
- U.S. unemployment stalled at 8.2 percent – UPI.com
- US employers add 80,000 jobs as economy struggles – Associated Press
- Jobs Data Indicate Slowing Growth – Wall Street Journal
- For Romney, Jobs Numbers Offer Opportunity – Wall Street Journal
- 780,000 More Women Unemployed Today Than When Obama Took Office – CNSNews.com
- IMF to trim growth forecast as global crisis deepens – The Telegraph