Job Market Update: July 2016

May had employers and job seekers panicked, waiting to see if dismal growth would indicate an upcoming recession. While we are not out the woods quite yet, July’s growth is promising. Non-farm jobs are up by another 255,000 positions and the unemployment rate is holding at 4.9%. Large portions of this growth occurred in professional/ business services, healthcare, and finance.

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May had employers and job seekers panicked, waiting to see if dismal growth would indicate an upcoming recession. While we are not out the woods quite yet, July’s growth is promising. Non-farm jobs are up by another 255,000 positions and the unemployment rate is holding at 4.9%. Large portions of this growth occurred in professional/ business services, healthcare, and finance.

The average hourly earnings jumped another 8 cents from $25.61 to $25.69. Over the year, average earnings have increased by 2.6%.

The number of jobs added in May 2016 was revised from +11,000 to +24,000. June numbers improved a little as well, moving from +287,000 to +292,000. These revisions account for an +18,000 difference in jobs that were previously reported. The average number of jobs added per month, over the past 3 months, has increased from 116,000 to 190,000.

In Your Industry

After minimal growth in May and a spike in June, July’s growth may indicate that economy will continue to grow, for the time being. Most industries experienced moderate to high growth in July. This growth offsets losses occurring in labor-intensive industries. Mining is in a dismal state. After reaching peak employment in 2014, the industry’s growth has fallen by 26%.

Construction has begin to recover from losses in May and no change in June, adding 14,000 jobs. Every subsector experienced gains, which had not occurred in months. Though some growth happened in every sector, specialty trade contractors (+9,400) have consistently been the strongest subsector in Construction.

Manufacturing experienced moderate to growth, up by 9,000 positions. The largest percentage of that increase occurred in durable goods. Small gains and losses occurred in the Durable goods subsector. More specifically, transpiration equipment  (+11,500) and Machinery (+3,300) added a significant number of jobs. Several other subsectors downsized. Nondurable goods countered large growth in those subsectors as well, down by 2,000 jobs. Only two of these subsectors trended positively including food manufacturing (+500) and chemicals (+500).

Retail trade grew moderately, adding 14,700 jobs in July. Nearly every subsector experienced some growth. Nonstore retailers (2,800), gas stations (3,100), general merchandise stores (2,500) and food and beverage stores added the most jobs (1,800).  Building material/ garden supply stores, health/ personal care stores and department stores were the only subsectors to trend negatively in July.

Transportation and warehousing suffered modest losses, down by -9,400. Truck transportation and transit /ground passenger transportation was responsible for a large portion of the industry’s overall losses, down by about 6,000 jobs each. Warehousing and storage balanced some of the loss, adding 4,700 jobs.

Professional and business service’s growth accounted for a large portion of the economy’s overall growth, up by 70,000 jobs. July’s increase is almost twice as much as June’s. Nearly every subsector added jobs again. The largest gains were in Professional and technical services (+37,400) and Administrative support services (+31,100). Only two subsector experienced minimal loss in July, legal services (-200) and travel arrangement and reservation services (-100).

Education and health services grew. However, that growth appears to be slower than previous month with an increase of 36,000 positions. Despite, slower growth, it is still one of the strongest industries. Educational services took a hit, losing 13, 600 jobs. Once again Healthcare and social assistance accounts for the largest portion of growth with +48,800 jobs. Social services added 5,600 jobs.

Hospital added 17,100 jobs in July, reflecting healthcare’s steady employment growth.

Leisure and hospitality has accounted for a large portion of overall growth lately (+45,000). Increases in this industry eclipsed education and healthcare, a rare feat. Accommodation and food services added the most positions, up 27,300. Arts and Entertainment continues to grow as well, up by 17,500 jobs.

Temporary help services increase by 17,000 jobs.

In Your Region

Regional and state unemployment rates experienced more fluctuation in June when compared to May. Unemployment rates increased significantly in 6 states, decreased in 1 and remained the same in 43 and the District of Columbia. When compared to the previous year, 16 states and the District of Columbia have seen an increase in employment.

The joblessness rate was higher month over month but down 0.4 percentage points when compared to June of 2015. As is typical. the West was the only region to see unemployment rate significantly different than the national average.

Again, following the trend, The West North Central region has the lowest unemployment rate, at 3.8%. The Pacific region had the highest rate, 5.3%. South Dakota (2.7%) and New Hampshire (2.8%) had the lowest jobless rates in June. Though they are the lowest, both rates are higher than they were in May. Alaska had the highest joblessness rate at 6.7%.

Check out these key regional highlights from the BLS “Regional and State Employment and Unemployment –June 2016" report.

MID-ATLANTIC

For the third month in a row, the Mid-Atlantic region’s unemployment rate is 5%. New York’s unemployment is also holding steady month-over-month at 4.7%. New Jersey’s increased another .2% from 4.9% to 5.1%. Pennsylvania is the highest with 5.6% percent, increasing by a percentage point.

MIDWEST

The Midwest’s joblessnes rate decreased from 4.8% to 4.7% and was below June’s national average. Illinois maintains the highest unemployment rate in the region at 6.2%, a .2% decrease from the previous month.

North Dakota (3.2), South Dakota (2.7), Nebraska (3.0), Minnesota (3.8), Iowa (4.0) and Kansas (3.8) all have unemployment rates at or below 4.0%. Michigan (4.6%), Missouri (4.5%) and Wisconsin (4.2%) have rates lower the national average. Michigan is at May’s national unemployment rate. The Detroit metro area’s unemployment is falling, going from 5.2% to 5.1%. Illinois, Indiana and Ohio continue to balance the extremely low rates of other Midwestern states.

NEW ENGLAND

The New England region’s unemployment rate is holding at 4.4. Vermont (3.2%), New Hampshire (2.8%), Maine (3.7%) and Massachusetts (4.2%) have extremely low unemployment rates. Each state in the region experienced a slight increase in the unemployment rate. To counter low unemployment in most of the region, Connecticut (5.8%) and Rhode Island (5.5%) both have unemployment rates well above the national average of 4.7%.

SOUTH

The South’s unemployment rate fell another 0.1% to 4.7% month-over-month. In June, the West South Central and South Atlantic region’s both had unemployment rates lower than the national average at 4.7%. The East South Central region’s (5.0%) is slightly higher. Texas (4.5%), Arkansas (3.8%), Virginia (3.8%) and Tennessee (4.1 percent) have the lowest unemployment rates of the region. Most of these states experience a 0.1% decline.

WEST

The West continues to have the highest unemployment rate of any region in the country at 5.2%. When compared to the previous year, the unemployment rate is lower. It has dropped by .6%.  Colorado continued to experience a rise in the employment rate over the month of June up from 3.3% to 3.7%. While Washington (5.8%), Nevada (6.4%), Wyoming (5.7%), Arizona (5.8%) and New Mexico (6.2%) have some of the highest and are well above the national average.

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