For the third month in a row, the U.S. experienced only a small month-to-month gain in employment in June, according to the latest Employment Situation report from the Department of Labor Statistics (BLS).
The net increase in the number of jobs was 80,000 in the latest month, staying in line with similar advances in May (+77,000) and April (+68,000).
The numbers in the latest three months have been significant comedowns from January’s +275,000, February’s +259,000 and even March’s +143,000.
The monthly figure has to be in six digits to make much of an impact on the unemployment rate, which stayed at 8.2% in the latest month.
The biggest portion of the 80,000-jobs improvement in June was provided by the service sector, +71,000.
Furthermore, it was the professional and business services sub-designation that made the biggest leap, +47,000.
Delving further, there was a 25,000-increase in positions with temporary help services. This does not indicate a labor market with a deep undercurrent of strength.
A proliferation of part-time work suggests employers are uncertain about the future and are hedging their bets. When additional staffing is required, they are making sure they can reverse direction easily should business conditions deteriorate.
The pessimism about the U.S. labor market – given how difficult the world economic situation is at present – may be overstated. There are quite a number of positives that can be mentioned.
Year-over-year employment in the U.S. has risen by 1.8 million jobs. The annual percentage change has been +1.4%, which is approaching a significant benchmark.
Historically, a +2.0% to +2.5% year-over-year jobs gain has accompanied an economy that is functioning smoothly.
Service-providing employment was +1.8% in June of this year versus June of last year, a borderline impressive increase. The number of service sector jobs in the country, at nearly 93 million, is only one million short of its pre-recession peak of 94 million.
Services account for 70% of all U.S. jobs.
In the goods production side of the economy, construction employment has remained very low and flat, although the unemployment rate has improved to 12.8% from 15.6% a year ago.
Manufacturing jobs – at least until the latest couple of months, have been making a modest comeback. The level has improved slowly since the fall of 2009 and the year-over-year percentage increase has been near the magic +2.0% since the fall of 2010.
Retail trade employment has recovered about one-third of its peak-to-trough decline, but it has become stuck in its present position for the whole of this year so far.
Transportation and warehousing employment – which ties to retail, but also depends on manufacturing activity levels and foreign trade opportunities – has exhibited a firmer upward trend. Its level has now returned about halfway to where it was during its glory days.
Education and health employment continues to do nothing but increase in small steps, setting new record highs each month. Jobs in the information sector, on the other hand, are still on a downward slide.
Leisure and hospitality employment is a marvel. It’s higher now than ever before, including the halcyon days just before the recession hit. For more than a year, it’s been increasing at a rate between +2.0% and +3.0% year over year.
With the exception of a spurt of short-term hiring for the census, employment in the government sector has been falling since mid-2009. The cumulative drop so far has been over 700,000 jobs. This trend in federal, state and local employment is opposite to the kind of public sector spending support offered in previous recovery periods.
As a final comment on the American employment picture, the latest week-ending (June 30) initial jobless claims figure moved in the right direction. At 374,000, it was a promising improvement versus numbers that returned close to 400,000 in the preceding four reporting periods.
When the number of first-time unemployment insurance seekers falls to around 350,000 each week, the monthly increase in jobs rises to a range of 150,000 to 200,000. That was the experience at the start of this year and that’s what everyone’s waiting to see repeated.
Canada’s population is approximately one-tenth that of the United States. In June, Canada’s gain in employment was exactly 10% of the American figure.
Statistics Canada’s latest Labour Force Survey report records a June net increase in jobs of 8,000. Because fewer people were looking for work, the national unemployment rate declined by one percentage point to 7.2%.
Year over year, Canada has created 180,000 net new jobs. Half that increase (+93,000) has come from the services side – which accounts for nearly 80% of all jobs in the country – with more than one-quarter provided by a surprising source, manufacturing (+54,000).
Manufacturing employment in Canada in June was +3.0% year over year, outstripping all other sub-categories except educational services (+6.9%) and natural resources (+10.9%). The latter encompasses workers in forestry, fishing, mining, quarrying and oil and gas. While it’s a broad category, it’s not large in terms of absolute number.
Construction employment in Canada in June was flat (-3,000). July 2011 was the last month in which there was a large jump in the number of on-site construction workers. Since then, the net figure has been -26,000. The decline has come despite a housing sector that has maintained a high starts level, more than 200,000 units in 9 of the last eleven months.
Canadians should be pleased about the nature of the new jobs that have been created over the past 12 months. The 180,000-increase has resulted from 220,000 more full-time positions, while part-time work has contracted by 40,000. Full-time jobs are usually more stable and higher paying.
As for the private-versus-public-sector proportion, the former has created 160,000 net new positions in the past year, while the latter has added 20,000. The extra government workers have been hired despite budgets that clearly set out intentions to downsize.