Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Non-Farm Payrolls Increased 195,000 in June, Beating the Consensus Expected 165,000
Posted Under: Data Watch • Employment

 
Implications: Very good report on improvement in the labor market, with job growth and wage growth both beating consensus expectations. Nonfarm payrolls increased 195,000 in June and were up 265,000 including revisions to prior months. Government payrolls are still shrinking, so all of the gains were in the private sector. The labor market once again forcefully rejected the theory that the sequester is hurting the economy. Since the sequester went into effect, nonfarm payrolls are up an average of 183,000 per month versus 132,000 for the same four months (March – June) a year ago. Although the unemployment rate stayed at 7.6%, the "unrounded" figure was 7.557% (so, very close to a 7.5% headline). Civilian employment, an alternative measure of jobs that includes small-business start-ups, rose 160,000, while the labor force was up 177,000. Total hours worked were up 0.2% in June, revised up for May, and up 2.5% in the past year. In combination with a 2.2% gain in average hourly earnings in the past year, total cash earnings are up 4.7%. After adjusting for inflation, these earnings are still up 3%+ from a year ago. In other words, workers are generating more purchasing power, consistent with our view that consumer spending will accelerate over the next couple of years. Another positive detail in the report was that the share of voluntary job leavers among the unemployed hit 8.8%, the highest since 2008. A higher share of job leavers shows workers are getting more confident about future of the labor market. The negative details were that the household survey, which generates the civilian employment numbers, says all of June's job gains were among those age 20-24 (particularly women) and for part-timers. It also showed that the job gains were concentrated among multiple job holders. Given the volatility in these data series, we would not put too much emphasis on one month's worth of data. However, it's consistent with the large payroll gains for retail as well as restaurants & bars and probably shows some firms who would be hiring full-timers are hiring part-timers to avoid Obamacare. The big financial market question is how the Federal Reserve reacts to today's report. We think the numbers support the case that it will announce a tapering of its asset purchases in September. Obviously, the labor market is far from perfect. What's holding us back is the huge increase in government, particularly transfer payments, over the past several years. Despite that, entrepreneurs and workers are gritting out a recovery and the Plow Horse economy keeps moving forward.

Click here for a PDF version
Posted on Friday, July 5, 2013 @ 9:40 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.