The United States economy continues to flourish, according to the June Employment Situation Report released today by the Bureau of Labor Statistics (BLS). Total nonfarm payroll employment in June rose by 224,000 jobs, far exceeding market expectations (162,000). With July marking the longest economic expansion on record, it is a testament to the strength of the Administration’s economic policies that the economy continues to generate monthly job gains of this magnitude.
Including revisions for the months of April and May, the average pace of job growth has been a vigorous 192,000 jobs per month over the past year. In total, the economy has added more than 6 million jobs since President Donald J. Trump was elected. The June jobs report also reflects a rebound in job growth, suggesting that May’s revised outcome (+72K) was not a trend (see figure).
The education and health services industry, which added 61,000 jobs, experienced the largest job growth in June. Manufacturing jobs increased as well, gaining 17,000 jobs last month. Since the President’s election, the manufacturing industry has added more than 500,000 jobs.
The June report indicates that robust jobs growth is coupled with consistently strong wage growth. Nominal average hourly earnings rose by 3.1 percent over the past 12 months, marking the 11th straight month that that year-over-year wage gains were at or above 3 percent. Prior to 2018, nominal average hourly wage gains had not reached 3 percent since April 2009.
There is evidence that real wages are also growing when taking inflation into account. Based on the most recent Personal Consumption Expenditures (PCE) price index data from May, inflation in the past year was 1.5 percent, and based on the most recent Consumer Price Index (CPI-U) price data from May, inflation in the past year was 1.8 percent. (June inflation data is not yet available for either series.)
A separate household survey released by BLS shows that the unemployment rate ticked up to 3.7 percent in June—a change that is not significant—making June the 16th consecutive month at or below 4 percent. The Asian-American unemployment rate dropped to 2.1 percent, its lowest rate since at least 2003 when the current series began. The African-American unemployment rate ticked down by 0.2 percentage point to 6.0 percent, just above the May 2018 series low of 5.9 percent. (Consistent measurement began in 1972.)
There was also good news on the labor force participation rate—which includes people who are working and those looking for work—edged up by 0.1 percentage point to 62.9 percent and is 0.2 percentage point above the rate when the President was elected in November 2016. The labor force participation rate for prime-age adults (ages 25-54) which largely avoids the demographic effects of the aging population increased by 0.1 percentage point to at 82.2 percent—0.8 percentage points above its rate in November 2016 when the President was elected.
A prosperous economy stimulated by pro-worker policies is pulling workers off the sidelines. Despite the continued low unemployment rates over the past year, some workers may still be on the sidelines, a situation economists refer to as “labor slack.” Because labor market slack still exists, employment can continue to rise and the economy can continue to grow as workers reenter the labor force. In the second quarter of 2019, 73.7 percent of workers entering employment came from out of the labor force rather than from unemployment.
The June employment data portray an American economy that is humming along briskly, with a continued low unemployment rate, historic trends in job growth, and rising wages.