In June 2010, the US unemployment rate fell to 9.5%. This was better than market expectations for the rate to rise to 9.8% from 9.7% in May. The US unemployment rate had moved up from a low of 4.4% in March 2007, to a peak of 10.1% in October 2009. Since October 2009 the rate of unemployment has generally eased lower. This month the labour market participation rate fell by a surprise 0.3 percentage points, which flattered the unemployment rate (see chart attached).
During the month non-farm payrolls fell by 125 000, which was essentially in-line with market expectations. The previous two months data (April and May 2010) was revised up by a total of 25 000, which is a very modest revision. The main reason for the reduction in employment in June was a 225 000 decline in the number of temporary employees working on Census 2010. The private sector gained 83 000 jobs in June, which was slightly less than expected (market expected +110 000), but a welcome improvement relative to the 33 000 jobs created in May 2010.
Since December 2007 (when the US recession officially started), payroll employment has fallen by a net total of 7.48 million, or 5.4%.
During the month:
- Within leisure and hospitality, employment rose over the month by 28 000 in amusements, gambling, and recreation.
- Within professional and business services, employment continued to increase in temporary help services (+21 000). Employment in temporary help has risen by 379 000 since a recent low in September 2009. Elsewhere in professional and business services, management and technical consulting (+11 000) and business support services (+7 000) also added jobs over the month.
- In June, transportation and warehousing added 15 000 jobs. Since a recent low in February, this industry has added 44 000 jobs.
- Health care employment edged up in June (+9 000). Over the past 12 months, the industry has gained 217 000 jobs.
- Mining employment continued to trend up in June (+6 000); the industry has gained 56 000 jobs since October 2009. Within mining, support activities added 7 000 jobs in June.
- Manufacturing employment continued to trend up over the month (+9,000). The industry has added 136 000 jobs since December 2009.
- Construction employment decreased by 22 000 in June, with the largest decline in nonresidential specialty trade contracting. On net, construction employment has shown little change over the last 4 months.
- Employment in other private-sector industries, including wholesale trade, retail trade, information, and financial activities showed little change in June.
- Government employment fell by 208 000 in June, driven by the loss of 225 000 temporary workers hired for Census 2010. Employment in both state and local governments was little changed over the month.
Although, the employment levels are trending in the right direction (the 6-month average rate of change in payrolls is now positive), the rate of employment rate fairly subdued. The job market is likely to take a number of years to fully recover, especially when one considers that the previous two employment booms in the US were driven by very specific industry dynamics, namely the growth in the hi-tech sector, which ultimately led to a bubble in technology stocks, and the growth in the housing market, which ultimately led to a structural oversupply of housing and the credit crisis.
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