June Jobs Report Sends Confusing Message

There was not much excitement in the June  unemployment report from the Bureau of Labor Statistics. The unemployment rate fell a tenth of a percentage point to 3.6%. For 15 months the rate has stayed in a range of 3.4 to 3.7%. From a conventional point of view, that is full employment, but it is not. A Full Count of real unemployment includes part-timers who want full-time work but cannot find it and full-timers who have had their hours cut. These involuntary part-timers increased by 452,000. A Full Count also includes job-wanters who have not searched for work recently. Their number dropped by about a hundred thousand. Combining the officially unemployed group of 6 million, the involuntary part-timers at 4.2 million, and 5.4 million job-wanters not currently searching yields an unemployed population of 15.6 million. That is up by 300,000 over May. The real unemployment rate is 9%, up from 8.9% in May.

Highlights and Lowlights

            White unemployment was just 3.1% in the official count.  Black unemployment jumped to 6.0% and was thus again double the white rate. (In April, the Black rate was just 4.7% and the white rate 3.1%.) The Black teen unemployment rate jumped from 10.3% 15.6%. (This number seems volatile, perhaps because it involves a smallish sample.) The Hispanic rate rose from 4% to 4.3%. The disabled rate fell from 7.8% to 6.8%.  And Asian-background workers’ unemployment rate rose a bit from 2.9% to 3.2%, but the latter is quite low.

            Perhaps the most exciting piece of information in the BLS report was the count of total job additions from the survey of employers. Before the BLS report came out, the stock market fell 400 points on a report by the private payroll firm ADP that job additions would be a whopping 497,000. In this Orwellian area of job totals, remember that good news is bad news. Traders expected that a huge job increase would inspire the Federal Reserve to raise interest rates and put the brakes on the economy. So markets fell.

            Turns out that job additions were just 209,000. ADP was off by 300,000. Oops! For workers in the real world, the addition of 207,000 is a plus but nothing to write home about. Job additions in recent months have mostly been not bad but on the low side. Certainly not enough for real full employment.

Quits and the Great Resignation: Occasions for Exaggeration.

            When the worker quit-rate rose substantially in 2021 and 2022, we probably exaggerated what was happening by calling it the Great Resignation. At times it seemed as if everybody was walking out the door. More quits were linked to workers’ confidence that they could find other, better jobs–there was huge demand for workers as the recovery took off–and that they had generous government benefits to back them up.

            From information in the BLS’s JOLT (Job Openings and Labor Turnover) reports, there is no question that quit rates in the pandemic were the highest in the 21st century. More than four million employees quit every month from June 2021 through December 2022. But so far this year, the numbers have been just a bit under four million. In other words, they are still pretty high. If we are driven into a new recession, and if income-supports for jobless people are slimmer than in 2021-2022, we may see quit-rates plummet. But they are not plummeting yet.

            I believe that we made the number of quitters in the pandemic period seem higher than it was, in part, because we were amazed at how many people were leaving their jobs during a recession. But some of us did it also because we need headlines and themes that excite, so we exaggerate. And now one source presents counter-exaggeration. Quit rates are falling a little, and a few more people are keeping their jobs. But must that be made out as a big trend? The Great Resignation is over and, from Business Insider, we have new catch-phrases: “The Big Stay,” and “grumpy stayers.” Let’s not exaggerate the decline in the number of quitters. It is not yet that drastic.

            Other information from the JOLT report is mixed. Job vacancies reported by employers fell by 496,000, and that included an ominous decline in retail job openings of 125,000. Still, employers reported almost 10 million vacancies. That seems like a lot, even for our large labor force. And think about these two numbers: hiring rates are not falling as we’d expect in a run-up to recession. They have been pretty steady at six million a month.  And layoffs aren’t up much but  perhaps enough to explain why initial claims for unemployment benefits in the last four months are 10%  to 15% higher than they were in the preceding eight months. If you are in the gloomy school with Kelly Evans of CNBC, and expect a recession soon, you have some evidence here. And I do fear that Federal Reserve Chair Jerome Powell will drive the economy into a recession in a mad effort to push inflation rates down to 2% a year. But it is not too late for him to do the right thing. The May inflation increase was .1% and the June increase .2%. Prices are now just 3% above where they were a year ago. Powell ought to be working on a speech about our victory over surging prices and our ability to live with and benefit from moderate price increases.

Real Issues    

            We may not be sliding into a recession, but all is not well with work in the United States. There is too much unemployment. There are way too many lousy jobs, too many very-low-wage states, and too many state politicians striving to get more children to work longer hours in dangerous conditions.

            On the bright side, workers are fighting back in numbers that would have been surprising in the pre-pandemic era. Out where I live, Hollywood writers are on strike for better compensation and protection against AI ripoffs of their work; actors may join them soon. Workers are selectively striking major hotels in Los Angeles, at the airport, and around Disneyland. Many of them spend half their lives driving to work. Some have to work two jobs to make ends meet. They don’t sleep much. UPS drivers–340,000 Teamsters–voted overwhelmingly to authorize a strike when their contract expires on July 31. There are many pressing issues, including higher pay for part-time workers, no forced sixth day of work in a week, more full-time jobs, and air-conditioned trucks. In terms of its share of the total work force, the working-class upsurge is still relatively small, but it does not seem to be dying. And it continues to pop up at Starbucks stores, and even among Waffle House workers in South Carolina.

Frank Stricker is emeritus professor of history, California State University, Dominguez Hills. He is a member of National Jobs for All Network and Democratic Socialists of America. His opinions are not necessarily those of any of his organizations.