The economy added 224,000 jobs in June, according to the latest employment report, extending the longest economic expansion in history. June’s number is significantly higher than May’s disappointing growth of 75,000 and even exceeded expectations. Downward revisions to April and May, meanwhile, subtracted 11,000 jobs from the total gains.
This is a noticeable increase from the pace we’ve experienced this year so far, which has averaged 162,000 a month, and faster than the average monthly growth for the last 12 months (195,000). While job growth in May and February of this year was well below trend, strong June job growth is a sign that the economy is not in slowdown as it continues to approach full employment.
The unemployment rate ticked up slightly to 3.7 percent, while the overall labor force participation rate and the share of the population with a job were also relatively unchanged from May. On the whole, the household survey suggests an economy that is holding steady, while the payroll survey shows strong job gains over the last month.
The share of the prime working-age population (25–54 years old) with a job held steady at 79.7 percent, while the prime-age unemployment rate and labor force participation rate ticked up slightly. Participation among 25 to 54 year-olds has declined since the beginning of the 2019, but seems to be leveling off in recent months.
As I wrote about in my jobs day preview, black unemployment remains significantly higher than the white unemployment rate (6.0 percent versus 3.3 percent), but it did tick down 0.2 percentage points from last month. While this is an extremely volatile series, June marks two consecutive months of improvements, following a troubling upward trend in the black unemployment rate during the earlier part of 2019. The decline in the black unemployment rate in June was also accompanied by a lower black labor force participation rate and a smaller share of people employed. This suggests that the lower unemployment rate was the result of people leaving the labor force and not more people finding jobs.
Wage growth came in at 3.1 percent over the year—consistent with growth in May. As you can see in EPI’s nominal wage tracker, there has been a distinct leveling off in wage growth in recent months. While June’s 3.1 percent growth rate is higher than the slow rate we saw earlier in the recovery, it is still below the rate we’d expect to see in a strong economy. To be at genuine full employment, wage growth would have to be at least 3.5 percent, and for a consistent period of time to allow labor’s share of corporate sector income to recover.