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The U.S. added another chunk of jobs last month … just not enough to signal that we’re firing on all cylinders.
First, the numbers …
 America added 223,000 jobs in June, a bit light of forecasts for 233,000. That was also down from a downwardly revised 254,000 in May. In fact, the last two months worth of readings were revised lower by a combined 60,000 jobs.
 While retail jobs rose by 33,000, health care jobs rose by 40,000, and leisure and hospitality employment climbed by 22,000, manufacturing barely budged at +4,000. Mining lost 4,000 and construction flat-lined.
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| Unemployment fell to 5.3%, the lowest since April 2008. |
 Unemployment fell to 5.3% from 5.5%, putting it at the lowest level since April 2008. But some of that improvement was because the labor force participation rate dropped all the way to 62.6% from 62.9%. That means fewer working-age Americans are gainfully employed than at any time since 1977.
 As for wages, average hourly earnings didn’t budge at all. That lowered the year-over-year growth rate to 2% from 2.3% a month earlier.
If I had to characterize the data, I’d call it wishy-washy. Meh. Lacking the kind of fireworks we’re all going to be setting off and watching this weekend. We didn’t add enough jobs, and we didn’t get the kind of wage growth we’ve been actively seeking for so long.
It’s not a recessionary report by any means. But it’s obvious to me that the dollar’s huge rise last year and energy’s major decline are still weighing on the economy.
Our multinational manufacturing firms are competing with one arm tied behind their backs, thanks to the dollar surge. High-paying, skilled jobs in the oil and gas sector have been evaporating thanks to the decline in prices and drilling activity. And don’t even get me started on out-of-control health care costs, increased regulation, and uninspiring tax policy either. All of them are contributing to the lackluster pace of the recovery.”
| “The dollar’s huge rise last year and energy’s major decline are still weighing on the economy.” |
Markets initially had a fairly muted response to the figures since they were neither atrocious nor awe-inspiring. But attention rapidly shifted to the major developments overseas – in China, Greece, and the rest of Europe.
What happens over the long weekend in those regions will hold the key to the next major market moves. I, for one, will be keeping my eye on overseas developments in between cheeseburger bites and firework lights. And I’ll tell you what happened and what you should do once markets re-open. Stay tuned!
In the meantime, the floor is yours. What do you think of the latest jobs news? Why aren’t wages accelerating? What would help the economy create more jobs? Should we do something in Washington to help manufacturers and energy producers, since they’re the economy’s weakest links? Let me know over at the website.
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What will happen next with interest rates? What’s going on in the job market? Those were a couple of issues you were debating over at the website.
Reader Paul F. said: “The job market goes hand in hand with the declining middle class. How can we increase jobs in America when corporations continue to take them overseas and/or automation deprives the middle class of raising their standard of living? American corporations do not care about America. They care about the bottom line.
“CEOs would rather pay a fine for polluting when they get caught instead of solving the problem that would be more then the fine, and hopefully not getting caught. It all comes down to greed — worldwide greed.”
Reader Michee added: “What do I think about jobs? If the government told the truth, the economy would tank. They are creating a minimal amount of low-paying, part-time jobs. The actual unemployment rate is probably closer to 25% and our manufacturing sector will probably never come back. That along with the new trade agreements should drive us into the ground.”
Meanwhile, Reader Jim S. said: “I have been short the 30-year bond for about four months now. Thanks for the warning.”
And Reader Fred151 said: “Several weeks ago you talked about the growing spread in lower quality bonds vs. high quality, short-term Treasuries. Your thinking then was that this was a good sign of recovery.
“My response was the opposite: My thought was that this was an indication of fear. I still believe it is fear. When investors see what is happening to these munis (like Puerto Rico finally calling a spade a spade and going broke), they are bailing fast and thus you are seeing these charts. So many of these entities are de facto broke, but it is like the emperor has no clothes and the press ignores it.”
Well, it’s clear the official jobs report wasn’t as strong as it could’ve been. But it continued the trend of decent readings, and the unemployment rate ticked a bit lower.
With regards to bonds, yes, there are definitely some warning signals being sent out by the market. I’m watching closely to see if the selling spreads to more sub-sectors of fixed-income … and if it does, that’d be a sign to raise even more cash.
Anything else you’d like to add this long holiday weekend? Then don’t hold back. Put down the fireworks for just a minute and add your comments on the website.
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Depending on the vote’s results, Greece could either be headed for a Grexit … or secure a new deal with its European creditors. The controversial finance minister there has already pledged to resign if we get a “Yes” vote, and frankly, the rest of Europe would be very happy to deal with someone other than him and the rest of his Syriza party.
Share your views over at the website when you can.
Until next time,
Mike Larson
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Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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It was demonstrated twice that money given to the consumers gives a 2 1/2 multiplier effect which is not available if the money is given to the producers. The President’s policies are holding us in the resession. His miss application of the Tarp Fund allowed us to crash. He is the actor that is killing us. RWM
We need to do several things that aren’t going to fly with the Obama administration. First, is to lower the corporate tax rate to 15%. With corporate tax rates at 40% the highest in the world are corporations are punished for making a profit. If the tax rate was lowered to 15% we would see a lot more investment that could fuel job creation enormously. Second, regulations are killing our companies. As if Obamacare is not enough now Obama has the EPA destroying the coal industry with their rediculous regulations to stop the hoax called global warming. Third, the artic and continental shelf need to be opened for oil drilling. Also government lands with huge oil deposits need to be opened for drilling. Energy indepedence is a national security interest. We should never again have to depend on OPEC for our oil needs. We need to become a net exporter of oil and natual gas. More natual gas terminals need to be built to convert the gas into liquid so it can be shipped overseas. That’s my take on things.
Right. Let’s open new areas for drilling, while the areas actually open to drilling are being shut down due to the lower price of oil. Maybe we should get the government to drill these new wells and store the oil for “national security” purposes. And no one will complain about the tax increases necessary to support said government drilling. That’s my take on things.
Maybe people need to pay a bit more attention to that TPP thing. How many realize it would take the place of our Constitution in certain cases. A panel of three international lawyers could choose to overturn certain rulings of our Supreme Court. One World, anyone? Obama wants this Internationalist thing to go through – isn’t that tantamount to treason?
OK, then. Could they overturn the SC on Obamacare; on Gay Marriage? Let’s choose those lawyers carefully.
Hi Phil,I agree with you on gay marriage,to be gay you have to have sex with the other guy,how can that be natural,maybe I am un-natural.What happens if the guy has a sex change(now female)MMmm.and she marries a straight guy,is he then gay? I tell you the whole world is going daft.I cannot seem to get my head round it
Regarding Greece,The IMF has stated, they will not fund Greeces spending anymore,so if they say YES who is going to give them more,Any Gov. can only tax the people or raise interest rates(Yeah! that’s definitely going to work) If your skint your skint.
The govt. figures lie, except a few. Unemployment numbers are a sham since after receiving unemployment benefits to the max, they drop out of the numbers, and that’s reflected in the lowest labor participation rates in about 40 years. Include the latest assault on small business just announced, and you have the formula for more anemic job growth. All in all, and after squandering $18 trillion, the “money printers” have terribly little to show for it, and we’re in debt up to our eyeballs….forever. Pity the middle class, the poor suckers who work hard, save their money and wind up supporting the “OTHER” 50% of the labor force. It’s European Socialism- Obama style, and we all know how well that’s working over there.
Jobs statistics have been meaningless for years. The unemployment rate which completely ignores the long-term unemployed does not reflect that more than 90 million people are not gainfully employed, and many more that are not fully employed. A better way to look at this would to consider the labor utilization rate. Based on the total number of hours of labor available, we are well south of 75% which would suggest an actual unemployment rate north of 25%.
Ya’ll have taken note of the problem”Made in China” and all the money the once powerful U.S. now owes this country. It’s been said to boycott and buy only items made in America but slavery is against the law because about the only thing made in America is more babies. Now they(our politicions) want to allow anyone into the country because illeagles will work for next to nothing. Americans,on the other hand,want vacations four day work weeks AND benefits that our parents had. When I first started a family my goal was to provide for my wife and children, now college is out of the question and I’m still making about the same as I was thirty years ago.Retirement??? out of the question because with the welfare,social security fraud and politico’s taking everything the only thing left is to make sure that my grandchildren can shoot straight and live off the land because hell is about to hit and I will be ready.Revelations is a future telling truth. Beware all you money sucking basturds hell is beginning now. good luck to those of you who take for a living,I’m ready to watch you suffer in my back yard when I catch you taking whats mine!!!!!!
GREED!!! Plain and simple GREED!!! The corrupt in power everywhere, the fall of Christianity and SELFISH, HYPOCRITICAL GREED, masquerading as gods who will save us all! DONT get me started!!!!
Everything the government touches is destroyed. I have worked in the manufacturing industry for 20 years. Specifically the under ground mining and oil and gas sectors. Our country has been hijacked as early as the the 1900’s. The federal reserve and it’s debt based fractional banking system is designed to do nothing but remove the wealth of a nation placing it directly in the hands of the mostly foreign private family banking cartels. Barry soetoro doesnt run a thing just as Hillary ( a whole lotta people end up dead around me) Clinton the next puppet they will ram into the whitehouse. The global elite who run the country from behind the curtain have fooled all in at least this country into the false left right paradigm. My point being things are not what the corporate controlled media whores who look pretty spewing their poison on every channel from coast to coast tell you it is. Our country is unrecognizable from the foundation that made us the most prosperous desirable place to be on the face of the earth! The box you sit in front of slobbering on yourself has devastated our once great nation with lies and deception. Terror, terror, wmd’s, al-quaeda, Isis hate freedom. News for y’all the only A-holes that hate freedom are those who seek to dominate you and the world. We have passed the point of no return. The debt, unemployment, unfunded liabilities which in the early 80’s the gov began using fuzzy math equations to skew the truth. We can no longer even pay the interest on the money borrowed. Printed out of thin air backed by nothing but faith. Faith that the very people who make promise after promise and almost daily get caught in another lie or scandal or outright deception against the American people. So, we can talk economy and this and that all we want but nothing will be resolved until everyone can come to the understanding that it isn’t all falling apart by accident it is falling apart by design! Third world status for the whole planet no middle class just the elite and those who serve them. We the people it’s time to wake up and give the response the world expects of us the home of the free and land of the brave it’s once again time to send a message to those who seek to bring us to our knees. We know why things are the way they are now and those of you who are responsible for this planned disassembly of the most beautiful thing ever created by man the Constitution, Bill of Rights, and the Declaration of Independence will not be tolerated. We the people will fight! We have been backed into a corner as far as we are willing to go! It’s time to draw the line. Banish the federal reserve and imprison those involved in this abhorrent attempt of enslavement of the god fearing freedom loving people of the world! You fix these things and the economy would fix itself! FREEDOM! Nothing less.
Jesse, you r so right about so many things, but like today’s society, if we can’t hav it now it’s too long to wait; break it down to bite sized pieces… Too much gov’t? Yea, u r right! Too much intrusion? Yea, but best u can do is try to teach “those who won see”; my fear is too many of us too stupid about what matters and care too much about what doesn’t (like what color bathing suit Kim Kardasian will wear on the 4th) sadly, they get to vote too
Sorry my dip stick bro commented on my rant under my name! Not having an argument with myself!
“Glass half-full or half-empty”! Economic turmoil is just an empirical symptom of “change,” and that kind of volatility is wonderful! This weekend that “wonderfully” unpredictable process of revolution, redefinition and reemergence–later imaged in the torch of that aging beauty in New York harbor–may be a GLOBAL moment, no longer just our own in the USA. Political leaders in desperate countries today, using “game theory” to get their people the best deal they can (ex., Greece and Puerto Rico), are just doing their JOB; and those ~20% of US workers who fall “outside” the employment numbers are likely the “creative class” of a whole new world; all toward filling the glass! Change (like birth) hurts and is deeper and more personal than ANY “deal” or “bailout” can solve! But the free market system never fails to correct ultimate foolishness in time if the bulk of us each keep up our “courage, … imagination, and…unbeatable determination to do the job at hand” (Harry Truman). It’s a wonderful world! (Louis Armstrong).
Happy 4th of July!!!
1. Yep, we created 200k jobs, but how many did we lose? It is my understanding that while 200k were created, 400k were lost–yielding a net loss in jobs. That would explain the decreased labor participation rate quite nicely.
2. Yep, we created 200k jobs–or did we. How many of those jobs were phantom jobs inserted by their birth/death model? For some reason, it always seems to “add jobs”, and never subtract them.
For some reason, I really don’t trust their numbers very much. It sort of reminds me of a guy in a cold room holding a match under a thermometer and claiming it is warm because the thermometer says so.
always,
tony
We still waiting to hear what excuse Mr Larson has over his 17 June 2015 Bloody Wednesday please !
We still waiting to hear what excuse Mr Larson has over his 17 June 2015 Bloody Wednesday please !
Hi Mike
Until we get numbers we can trust from a Government that knows what it is doing I’m not going to lose a buck in productive investment in this country. The president is giving advice to Greece on how to manage their debt. This from a leader who has seen $US6 trillion added to our debt in his term and under his watch.
There is only one answer to Health Care—Single Payer System—-There is no care in Health Care only profit. The only exception is the unbelievably talented and dedicated men and woman of EMS. God Bless them all,…yeah I know….not gunna happen
There is only one answer to low wages—Capital Based Pay system…Ie: Your company makes 100 million. Money is divided among’st the employees at a predetermined percentage.Everyone has a stake at it’s success/failure. A company should only keep 1000% of it’s own market value all else must be disbursed.—yeah —I know—Not gunna happen.
There is only one answer to the unfairness of taxes…..Flat Tax System….Yeah I know
There is a solution to all the wonderful inventions laying dormant in the patent office….If you don’ use the patent, you purchased,with-in 10 years, it goes back to the original owner,free and clear. That would put the competing energy saving discoveries back on the market….yeah I know…….I will go back into my hole now……Peace…
In order for the economy to recover, we need an Administration that is pro business. Cut the corporate tax rate, eliminate the regulations that are impeding and causing small businesses to go out of business. Most of the hiring in this country in the last 30 years has been done by small businesses.
you give good advise on investing but what do you have to say about where to put cash? I know there is no return but where is the safest places, especially with the Euro problems, the bank problems, etc. Other than my mattress what is safe?
Saw some interesting stats this morning: the Economic Policy Institute says average CEO salaries increased 54.3% between 2009 and 2014, while the St. Louis Fed. says average wage earners earned 4% LESS between 2009 and 2013 (2014 figures weren’t available yet). The revival of Feudalism continues apace.