Today’s employment report shows that private sector payrolls increased by 57,000 in June and the unemployment rate ticked up to 9.2 percent. While the private sector has added 2.2 million jobs over the past 16 months, this month’s report reflects the recent slowdown of economic growth due to headwinds faced in the first half of this year.
The unemployment rate remains unacceptably high and faster growth is needed to replace the jobs lost in the downturn. Today’s report underscores the need for bipartisan action to help the private sector and the economy grow – such as measures to extend the payroll tax cut, pass the pending free trade agreements, and create an infrastructure bank to help put Americans back to work. It also underscores the need for a balanced approach to deficit reduction that instills confidence and allows us to live within our means without shortchanging future growth.
Overall payroll employment rose by just 18,000 in June. Sectors with employment increases included leisure and hospitality (+34,000), health care (+13,500), and manufacturing (+6,000). Sectors with employment declines included government (-39,000), financial activities (-15,000), and construction (-9,000). Manufacturing has added 251,000 jobs since the beginning of 2010, the best period of manufacturing job growth in over a decade. Meanwhile, local governments lost 18,000 jobs in June and have shed 355,000 jobs since the start of 2010.
The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.
Austan Goolsbee is Chairman of the Council of Economic Advisers