Where The Jobs Were In June: Who's Hiring And Who Isn't

After years of monthly payroll reports padded with excessive minimum wage waiter, bartender, educator or retail worker jobs, the June jobs report was notable for its top-line beat, and which was the record 93rd straight month of US job growth, offset by strong, if disappointing, wage growth, which at 2.7% came in below than 2.8% expected, perhaps due to the preponderance of part-time jobs, but nonetheless showed continued "late cycle" strength in most components even if some negative surprises were also present.

Of note: while last month's jobs report was truly impressive in terms of job gains by industry, with the highest paying adding the most workers, in June we saw a continuation of many of the trends observed last month:

  • Continued strength in Goods Production: Mining (+4K), Construction (+13K) and especially manufacturing (+36K).
  • Trade & Transportation Continued to Rebound: Wholesale (+2.9) and Truck Transportation (+2.5K).

Here the surprise was perhaps that just 2.5K trucking jobs were added, following complaints from the major trucking employers, all of whom have noted they can't find enough people to hire, which suggests there may be an upward revision next month.

As Southbay Research notes, there were several other factors that actually depressed the seasonally adjusted number from rising as much as 250K, chief among them a sharply negative Seasonal Adjustment (-35K) which took some wind out of the June NFP sails. According to Southbay, "usually we can blame weather (as in 2016), but this is just BLS monkeying around."

Some other highlights:

  • Manufacturing (+36K): Up on auto (+12K) rebound after fire led to factory shutdowns
  • Retail (-21K): Falls on weak Food (-9K) and weak Merchandise (-18K).  Merchandise stores is Toys-R-Us bankruptcy layoffs
  • Professional Services (+50K): Strong on the back of white collar technical workers (+25K).  relatively weak Temp workers (+9K) suggests some weakness: either lack of supply (insufficient qualified workers at level of pay) or demand (employer demand is softer than surveys relate)
  • Healthcare (+35K): Higher payrolls create more demand for healthcare

Visually:

Looking over the past year, the following charts from Bloomberg show the industries with the highest and lowest rates of employment growth for the prior year. The latest month’s figures are highlighted.

Finally, what trends can we observe from the latest report? As Southbay summarizes, "H1 2018 has been solid and June reinforced the strength":

  • Not Seasonally Adjusted payrolls are now the highest this business cycle.
  • Year-to-date Payroll (seasonally adjusted) is 213K (vs 2017 181K).

But June itself had the same level of payroll adds (not seasonally adjusted) as last year 2017. So heading into 3Q, the economy is strong but may no longer be surging faster than it was last year, same time, according to Southbay. This may also mean that the peak benefit from Trump's fiscal policy is now behind us and going forward it will only serve to depress the economic trendline.

Comments

tmosley Fri, 07/06/2018 - 10:08 Permalink

Ah, so it is retailers who lost jobs.

That is the best category to have for job losses. People need to stop buying cheap Chinese shit that they don't need. Instead buy high quality American made goods that will last a lifetime.

Rubicon727 Four Star Fri, 07/06/2018 - 14:47 Permalink

"This is the longest continuous period of jobs growth since WWII:

"The economy is strong" so says ZH's article. Sure, it's vibrant for the 10%-to the 1%.

But the 90%, meaning the vast majority of Amercans grow more and more impoverished. 

Dr. John Williams continues to record the unemployment rate using the old dynamics of counting jobs/unemployment still remains about 24%, but he doesn't take into account the "low wage/part-time jobs" that millions have to endure.

Sorry, but the reality is, the US is quickly becoming a financial banana republic.

 

 

In reply to by Four Star

dirty fingernails Quantify Fri, 07/06/2018 - 13:25 Permalink

*Labor* is the biggest concern, not taxes. How do you not grasp that if a 100% embargo of China was the new Trump policy, the factories would be moved to Thailand/Indonesia/Burma/etc? Until there is a barrier to foreign produced goods or American labor becomes competetive with slave labor, thise jobs aren't coming back. It isn't super complicated, but it does require a grasp of basic math functions.

In reply to by Quantify

Quantify dirty fingernails Fri, 07/06/2018 - 13:34 Permalink

Trump's policy would not be necessary had Congress lowered Corporate taxes long ago AND put tariffs on American companies importing goods that could have easily been made here in the U.S. This issue wasn't created by Trump, he just has to clean it up.

American companies have found solutions to labor expenses before with the automating much of vehicle assembly. I can understand some companies moving some production abroad. BUT a COMMUNIST country? WTF, how much of a greedy fucking asshole do you have to be to set up assembly of a phone production factory in a COMMUNIST country? Oh right Steve (the god) Jobs greedy.

I have NEVER bought a Apple product nor will I ever.

In reply to by dirty fingernails

Rubicon727 Quantify Fri, 07/06/2018 - 14:53 Permalink

"It was the fault of Congress when they had a 38% corporate tax on business but Trump fixed that. So they should be moving back now."

Try becoming a more informed citizens. US corporations NEVER paid 38% tax. NEVER. Why do you think they have an army of lobbyists in D.C.; untold numbers of accountants and lawyers to ALWAYS ensure the wealthy NEVER pay much in taxes

Trump made it even worse. The tax reform $$ went primarily to the 1%. It had negligible results for the 90% who received very little.

And being capitalists, Apple and all the other corporations will never, NEVER return to the US, unless the illiterate Americans are willing to earn near slave-wages. Which wouldn't surprise any informed person in the US.

In reply to by Quantify

Let it Go Quantify Sat, 07/07/2018 - 06:38 Permalink

America's tax plan will not have the effect many people hope. The structural issues that haunt America's competitiveness far outweigh the benefits of lower taxes. The ugly truth is American companies have little reason to bring jobs home, the logic that lowering corporate income tax will create a massive flow of jobs to our shore is flawed. 

Hidden within the tax bill are some provisions aimed at past violations of US tax laws that can lead to both civil fines and criminal prosecution for the corporate managers and their legal counsel who designed some of the schemes companies have used in the past. This could prove very important. More on why jobs may not come back in the article below.

 http://US Companies Have Little Reason To Bring Back Jobs.html

In reply to by Quantify

Malleus Maleficarum tmosley Fri, 07/06/2018 - 15:33 Permalink

Lots of Americans work at those retailers, so from that standpoint, that's not good at all! 

I'm a big believer in paying for quality from well-reputed brands, but it's getting harder and harder to find either of those things, regardless of origin of manufacture. Planned obsolescence is the harsh reality of most large manufacturers. 'Dollars today' trumps 'hard-earned good reputation' in most industries, sadly. Too bad, because I really believe there's a huge, untapped market for hand-crafted, artisanal lawnmowers and refrigerators!

In reply to by tmosley

Heroic Couplet Fri, 07/06/2018 - 10:28 Permalink

Bullcrap. Under George W Bush and elaine chao, to keep up with population growth and new workers entering the workforce, maintenance was 250K new jobs per month. They missed every month except for three, for eight years.

Rupert Murdoch warned Trump that if he were going to tackle immigration, he'd have to go after H1B visas or look like a jackass.

Quivering Lip Fri, 07/06/2018 - 10:34 Permalink

Up on auto (+12K) rebound after fire led to factory shutdowns.

So these people were fired (pun intended) and then rehired?

Higher payrolls create more demand for healthcare.

WTF? People make more money so they need more healthcare?

Consuelo Fri, 07/06/2018 - 10:41 Permalink

Question:

Are healthcare and education organic GDP producers - spawned and built by savings, which are then turned into profits after success...?

Let it Go Sat, 07/07/2018 - 06:43 Permalink

On the day when the BLS releases its latest jobs report that is watched closely by economists and investors it is important to remember that the quality of those jobs is very Important. The report suggests whether the American economy is on track and its future path of the economy but should also be a reminder that Americans don't just want jobs, they want "good jobs." More on this subject in the article below.

 http://Job Friday Is A Reminder It Is Good Jobs We Want.html