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Jill On Money: June jobs take-away - No recession yet

Jill Schlesinger on

Despite the hand-wringing over a coming recession and sentiment levels dropping to all-time lows, the June employment report showed that the U.S. economy is alive and well.

There were 372,000 new positions added and the unemployment rate remained at 3.6%, a tenth of a percentage point above 50-year lows that were reached in February 2020, before the wrath of the pandemic infected the jobs market.

Adding to the 6.7 million jobs created in 2021, total employment gains for the first half of 2022 are strong. In fact, the 2.74 million jobs for the six months from January through June is more than 20% ahead of the average gains for an entire year during the 2010s, according to Diane Swonk, the Chief Economist at Grant Thornton.

Despite the June progress, it appears that job creation is beginning to taper off, as the labor market makes a transition from the COVID recovery era into a more historically normal one.

After adding an average of more than a half a million jobs a month in the first quarter of 2022, job creation averaged just over 380,000 in the second quarter and is likely to continue to downshift in the second half of the year.

Adding to the uncertainty, labor market progress varies dramatically from sector to sector.

 

For example, leisure and hospitality added 67,000 jobs in June, but the industry still has 1.3 million fewer jobs than before the pandemic (February 2020).

At the other end of the spectrum, Professional & Business services increased by 74,000 during the month, improving its post-COVID job tally to a rousing 880,000 since February 2020.

In the middling category, employment in manufacturing increased by 29,000 in June, which means that after two years and four months, it has finally returned to its February 2020 level of employment.

Further post-COVID labor market dislocations have also persisted.

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