Nothing in the June jobs report to suggest any approaching US economic acceleration or surging inflation — or reason for the Fed to raise interest rates. The top line numbers were decent: 223,000 net new jobs, the unemployment rate fell to 5.3% from 5.5%. Also a big drop in the U-6 unemployment-underemployment rate.
The internals were less decent: The participation rate fell, the employment rate fell, the labor force fell by 432,000, April and May jobs were revised lower by 60,000, nominal wage growth was flat. What’s more, 2015 job growth of 208,000 a month is markedly lower than the 260,000 monthly average for all of last year. And if the participation rate had merely held steady from last month, that big jobless rate drop would have turned into a jump to 5.7%. Maybe this chart best sums up where we are six years into economic recovery (June was the anniversary month):
The employment rate for Americans in what should be the prime of their working life looks stalled at a depressed level. Sure looks like there is plenty of slack in the US labor market. As economist Justin Wolfers tweeted, “Every month that we learn that we can get more people back to work without stoking inflation, is fantastic.” Or to put it another way, via AEI’s Mike Strain:
from AEI » Latest Content http://ift.tt/1IRjzOi
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