Today’s Jobs Report: Cloudy With a Chance of Labor Market Slack

Man at work.


Here is the reason to be somewhat happy with today’s jobs report: In June, U.S. employers added 223,000 workers to their payrolls, according to the Bureau of Labor Statistics. Since the beginning of 2013, the U.S. country has added, according to my trusty Excel spreadsheet, exactly 223,000 jobs per month on average. It’s not often that you have a perfectly average month. This is like the harvest moon of economic reports.

Also, the unemployment rate fell to 5.3 percent, from 5.5 percent.

Jordan Weissmann

Here are the reasons to be less happy with today’s jobs report: pretty much everything else. The labor-force participation rate suddenly dropped to a new post-recession low of 62.6 percent, after holding more or less steady for roughly a year. (That’s part of why the unemployment rate fell—a smaller fraction of people in the job market.) The last time participation was this low was 1977, when women were still entering the workforce.

Meanwhile, hourly wages didn’t increase at all from May to June and the BLS lowered its estimates of job growth in April and May.

Upshot: The economy is still adding jobs at a reasonable pace (thankfully), but the labor market otherwise looked a bit tepid last month. It seems like evidence that there’s plenty of slack for it to keep adding new workers before inflation becomes any kind of a serious concern, which gives the Federal Reserve all the more reason to hold off on hiking interest rates this year. So, in other good news, you might have a bit longer to get a cheap mortgage. There’s always a silver lining.