June's Job Gains Are Good, but the Devil's in the Details
The U.S. economy is like a car that won’t shift from second gear into third: It’s moving forward and that’s great, but we’re not on the road that brings 3% GDP growth. The Bureau of Labor Statistics released its June jobs report this morning and the economy did generally what economists predicted it would do. The economy added 223,000 jobs and the unemployment rate declined to 5.3%. The U-6 measure of labor underutilization dropped to 10.5%. But here comes the frustrating part. The percentage of Americans who are working declined by 0.3% to 62.6%, the lowest since 1977. In fact, 432,000 Americans left the workforce — about twice the number that joined last month. Additionally, wages didn’t rise from last month’s $24.95 average hourly wage. After a couple months in which wages increased, another bump in pay would have indicated that the U.S. economy was healthy. The kinds of jobs added in June were encouraging, as there were increases in architectural and engineering services, health care and computer systems design. Interestingly, BLS reports that the gains in the financial sector increased mostly around insurance carriers. “Commercial banking employment declined by 6,000,” the report read. “Employment in financial activities has grown by 159,000 over the year, with insurance accounting for about half of the gain.” While Americans have been buying more insurance, coerced or otherwise, fewer of them have been frequenting their local bank. Could this be a small sign of the decline of the middle class?