While the number of net new jobs in June rose by 195,000, better than anticipated by many economists, there still was not the breakout-growth rate the markets have been waiting for since the declared end of the recession in July 2009. [With the recession end defined per the National Bureau of Economic Research.] To see how anemic the 195,000 job growth was, in comparison, 2000, which was not considered to a be a boom time, averaged 233,000 net new jobs per month.
The net change in jobs from the prior month are included in the following chart.
Total jobs as of the end of June 2013 still lagged the peak set on January 31, 2008, by 2.154 million. While there is indeed a recovery, it is the slowest recovery seen from a recession since 1950. Despite the positive message of 195,000 new jobs, the number of people working part-time (but would like to work full time) jumped by 322,000.
The big story for June employment numbers, however, was not the addition of 195,000 jobs, but that June saw 240,000 fewer full-time jobs than in May 2013. The next graph shows the change in full-time jobs from the prior month on a seasonally-adjusted basis. Note: The prior data are Labor Force Statistics from the Payroll Survey while the following data are Labor Force Statistics from the Population Survey.
Many economists associate the decline in full-time jobs and the increase in part-time jobs with the pending Obamacare initiation. Firms with less than 50 full-time employees are exempt from providing their workers healthcare coverage, with Obamacare defining full-time workers as those averaging 30 or more hours per week. This requirement is included in Section 1513 of the Affordable Health Care Act. Recall that these data were based on the assumption that enrollment for Obamacare would commence in October 2013.
Job gains in June 2013, when compared to May included:
- +75,000 in leisure and hospitality, including a gain of 52,000 in food services and drinking places and 19,000 in amusements, gambling and recreation
- +53,000 in professional and business services, aggregated by 8,000 new jobs in management and technical services, 7,000 in computer systems design and 10,000 in temporary services
- +37,000 in retail trade, including 9,000 in building material and garden supply stores, and 8,000 in motor vehicle and parts dealers
- +11,000 in wholesale trade
- +20,000 healthcare jobs, including 13,000 in ambulatory healthcare services and 5,000 in hospitals
- +17,000 financial services jobs, headed up by 6,000 each in insurance carriers and credit-related jobs
Federal government employment dropped by 5,000 (now down 65,000 in the past 12-months). The Federal government currently employs 2.753 million, excluding military personnel. Total government jobs (federal, state and local) now totals 21.851 million employees, making up 16.1 percent of all U.S. jobs, or 1 out of every six workers.
The loss in full time jobs and the corresponding gain in part-time jobs is no surprise, and is readily explained in Sir Isaac Newton’s Third Law of Motion: For every action, there is an equal and opposite reaction. I would expect to see even more divergence in these as 2013 progresses.
For those desiring greater details in U.S. employment data and related statistics, click here.
Ted