Part 1: The real unemployment rate – July 9th

posted by Brian Mudd - 

Part 1 - The real unemployment rate – July 9th   

Bottom Line: It's always that case that there's a lot more to a monthly employment picture than the jobs added or lost and base reported unemployment rate. There were all kinds of goodies to unpack from Friday's report. Here are some keys in the report from June... 

  • Headline unemployment rate 4% (highest since March & down from 4.3% year over year)   

  • 213,000 jobs added in June (+211,000 jobs per month averaged for the past quarter   

  • More revisions totaling a positive 37,000 jobs rolled in from prior months once again uniting the government averages with the ADP Private Sector Report averages 

  • +2.4 million new jobs added year over year – Averaging 200k new jobs per month for a full year! 

Top industries for hiring:        

  • #1 Professional and business services +50,000        

  • #2 Manufacturing +36,000    

  • #3 Healthcare +25,000 

Now for the real unemployment rate once underemployed and long-term unemployed people are accounted for:        

  • Actual: 7.8% down from 8.5% yoy  

Other key takeaways:          

1. When the long-term unemployed & marginally employed are factored in - the real unemployment is still nearly double the base reported rate   

2. The forgotten folks include 1.5 million are long-term unemployed (jumped by nearly 300k), 4.7 million are underemployed (improvement of 200,000) & 1.4 million are marginally attached to the workforce (100k improvement). 100,000 net improvement month over month   

3. The labor participation rate improved to 62.9% (.2% - improvement). Just over 600,000 new entrants entered the workforce in June which is why the unemployment rate rose despite positivity pretty much everywhere else.  

In part two we'll look at the demographics of the unemployed...      

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