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By Curtis Dubay, Senior Economist, U.S. Chamber of Commerce
The Bureau of Labor Statistics (BLS) June jobs report topline numbers are great. Digging into the data shows that more work is still needed to increase our workforce so we can maximize the prolonged economic boom we are in the beginning stages of.
The economy turned out 850,000 jobs, handily exceeding the consensus estimate of 700,000. The unemployment rate remained steady at 5.9% as 151,000 workers came back into the labor force. Wages grew 0.3% from May, and on an annual basis are up 3.6%.
With the 850,000 new jobs, there are 145.8 million jobs. That is 6.7 million below the February 2020 level of 152.5 million workers. At June’s pace, it would take another 8 months to get back to the pre-COVID employment level.
The less-good news is the workforce remains stubbornly small relative to where it should be given the reopening of the economy. The labor force was 161 million in June, down 3.4 million from February 2020.
The employment-population ratio is another way to look at the workforce. The Civilian Labor Force Participation data depends on definitions of who is working or looking for work, whereas the employment-population ratio looks solely at the segment of the population that is employed. In February of 2020, the ratio was 61.1%. Last month it was 58%, or 3.1 percentage points lower. That is a huge difference. If the employment-population ratio was the same in June as it was prior to COVID there would more than eight million more workers on the job.
Bottom line: Businesses are adding jobs at a rapid pace. Now we need to get workers into those jobs at a similarly rapid pace.