The real unemployment rate – June 2019
Bottom Line: There’s a lot more to the employment report than just a couple of headline numbers and after a historic April which brought us the lowest unemployment rate since the summer of 69’ - May had a lot to live up to. But it didn’t. It also wasn’t all bad news either and there’s more than enough to dig into to suggest that there’s still plenty of economic momentum as well. It’s important to tune out the noise and focus on reality. Here are the headline numbers from May’s reality.
- Headline unemployment rate 3.6% - unchanged
- +75,000 jobs added
- Negative revisions from past months totaling -75,000 jobs for a net number of 0
Top industries for hiring:
- #1 Professional & Business Services
- #2 Healthcare
- #3 Construction
A few important takeaways:
- Maintained lowest headline unemployment rate since 1969
- Effectively no new jobs added however &
- Outside of larger companies hiring, activity dropped off considerably in May
Now for the real unemployment rate once underemployed, long-term unemployed and marginally attached people are accounted for:
- Actual: 7.1% down from 7.7% yoy
Key takeaways:
1. The real-unemployment rate improved to the lowest rate since December of 2000 & there are only three months in recorded American history with a lower real unemployment rate.
2. Those unaccounted for in the base unemployment rate include 7.1 million Americans (1.3 million long-term unemployed, 4.4 million are underemployed & 1.4 million are marginally attached to the workforce). That’s an improvement of 200k over a month ago and is part of the hidden good news in this report.
3. The labor participation rate unchanged at 62.8%
Dig a little deeper and what may have looked like a poor report, takes on a different color. While few new jobs were added during the month, a couple of hundred thousand part-time jobs turned into full-time opportunities. That's great news for people most in need of opportunity.