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Economists and others weigh in on the June employment report.
â??There was a solid improving trend in place through April, but the labor market downshifted to a tepid footing in May and June. The anecdotal and survey indicators still for the most part suggest that we should be doing better. I take yesterday's ISM and today's employment data as providing hard evidence that the uncertainty and caution enveloping the markets since the beginning of May, unfortunately a key import from Europe, have had a real impact on the economy. The question at this point now becomes whether the economy is a deer in the headlights (frozen in fear momentarily but with strong underlying fundamentals still largely in place) or roadkill. I still see a full-blown double dip as a remote possibility at this point. Instead, I would look for a period of slower growth. â??Stephen Stanley, Pierpoint Securities
â??This was about as middle ground a report as you can get. As expected, the cut backs in Census workers led to a large decline in overall payrolls. But the more important number is the private sector jobs and that came in about where expected. That is, businesses added workers but not at a spectacular rate and clearly not fast enough to keep the unemployment rate declining, which it did. â??Naroff Economic Advisors
â??The sector breakdown suggests that there had been some substitution away from the private sector and into temporary Census jobs in recent months. For example, leisure and hospitality (an area that may naturally compete for the same short-term hires) jumped by 37,000 in June, having fallen by 7,000 in May. Weakness in the private sector was centered in construction (-22,000) and a slowdown in manufacturing hires, to 9,000 from 32,000 in May and 38,000 in April. While private sectoring hiring remains subdued, the rebound from May is an encouraging sign, and we expect private sector payrolls to rise further in the coming months. â??Peter Newland, Barclays Capital
â??This is the economy we have, not the one we want. The one we want would be well along adding enough jobs to take in new entrants to the workforce and begin to cut into unemployment. Adding 83,000 private sector jobs, of which 20,500 are temporary positions, and losing 10,000 state and local government positions, is not the stuff of robust recovery but it also isn't the makings of a double dip. â??Steven Blitz, Majestic Research
â??Although the private payroll number was better than expected, the details of this report signal the start of a summer of discontent for the labour market recovery. â??David Semmens, Standard Chartered Bank
â??Reassuring to see gains in many sectors including manufacturing, business services, education & health. No Double Dip but no rapid recovery either. â??John Silvia, Wells Fargo
â??Private sector employers added 83,000 jobs in June, which is certainly better than no jobs, but itâ??s a little more than half as many as we need to keep pace with population growth, let alone provide jobs for all those unemployed. Those seeking jobs right now face an excruciatingly high nearly five job seekers for every job opening. â??Heather Boushey, Center for American Progress
â??This jobs report is further evidence of a half speed, albeit sustainable, economic expansion. Double dips belong on your ice cream cones this holiday weekend and not in our baseline economic forecast! â??Stuart Hoffman, PNC
â??Broadly speaking, this is a negative report. Not only was private hiring less than we expected, but incomes and hours both declined. Both had been improving and while one month does not a trend make, this report does not present an encouraging mix of data. Beneath the headline, construction jobs predictably fell while manufacturing job growth, up for six months, slowed to a crawl. Temporary help services continue to be a bright spot, increasing another 21,000 and up 379,000 since September of last year. The bottom line is that job growth is ongoing, but the pace of growth is not nearly enough to meaningfully impact the unemployment rate in a sustainable manner. â??Dan Greenhaus, Miller Tabak
â??There are more negatives than positives in the June jobs report. Hours worked, which we have championed as the best measure of labor input, fell 0.2% (though for the quarter as a whole, grew at a robust annualized pace of 3.3%), while the drop in the unemployment rate was due to a decline in labor force participation not stronger job growth. In addition, the drop in average hourly earnings along with hours worked, points to a decline in June in wage and salary income of around 0.3% (this had been growing fairly rapidly). â??RDQ Economics
â??The household survey showed an unusually large decline in the participation rate which may have been related to seasonal adjustment problems around the end of the school year. The labor force plummeted 652,000 in June (reflecting a much smaller than typical gain of 900,000 prior to seasonal adjustment) and employment fell 301,000. Because this appears to be due to seasonal noise, we expect to see a rebound in the jobless rate next month? One of the most worrisome aspects of the report was the extent of the weakness in the manufacturing sector? Employment showed a smaller than anticipated rise but the big surprise was a plunge in the average workweek (from 40.5 to 40.0 hrs). Our translation of the labor market data to industrial production implies a 0.6% drop in the key manufacturing component â?? the lowest reading in more than a year. â??David Greenlaw, Morgan Stanley
â??The income and hours worked numbers fell on the month. We wouldn't characterize this as a â??double-dipâ? number, as the winning streak is alive and well for private jobs (6 straight months of gains, 7 of the last 8). But it certainly makes the recovery look soft, fragile, and considering the low starting point, unsatisfying. â??Jay Feldman, Credit Suisse
â?? Looking at the big picture, employment gains are lackluster. This economic recovery does not have enough momentum to sustain on its own without the government help. It is a catch-22 situation. Businesses are reluctant to hire for fear of a double-dip recession. Without jobs, the economy canâ??t grow limiting job growth and spending. â??Sung Won Sohn, Smith School of Business and Economics
Dig into an interactive summary of economistsâ?? forecasts for the coming year from the latest WSJ.com survey.
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â??That is, businesses added workers but not at a spectacular rate and clearly not fast enough to keep the unemployment rate declining, which it did. â??Naroff Economic Advisorsâ?
Would the Naroff folks please explain how, if businesses HAD added workers at a faster rate, that would have kept the unemployment rate from declining?
I do have to question the competence of most of these so called economists. Each and every one of them know that employment (hiring) is a lagging indicatorâ?¦these anemic numbers we have been getting recently are the results of the Trillion dollars spentâ?¦we got crap for it. Now, it is over and these numbers will trend worse as the realization that Aggregate Demand is driving the economy down because there was no real stimulus to change direction. Get a clue you half wit so called economists.
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