June Jobs Report Brings Good News For Recruiters
Another month, another jobs report. June’s labor market figures from the BLS were largely positive, a welcome respite from the recent negativity in the global economy. Overall the U.S. jobs market increased by 287,000 new workers in June, and the unemployment rate rose only slightly.
Other indicators such as the labor market participation rate and the employment to population ratio held steady. And the average hourly earnings, a closely watched figure these days, inched up yet again to $25.61. Compared to last month when the jobs report left many commentators wringing their hands, June’s numbers brought a sigh of relief to labor market watchers.
So what should recruiters take away from this month’s figures? As we’ve seen, the job market can fluctuate wildly or not at all, depending on an incredible number of factors. Recruiters should at least keep an eye on the overall state of the workforce, using the BLS report as an opportunity to check up on their competitors and their industry at large.
The Labor Market in June
We’ll start as usual with the overall figures on the U.S. workforce. Total payrolls increased in June, but May’s disappointing figure was revised downward to an even more disheartening 11,000. The unemployment rate went back up to 4.9%, still a far cry from the levels seen in the wake of the financial crisis.
The BLS also tracks the total number of adults who are employed only part time for economic reasons–that is, workers who would rather be full time but haven’t found that kind of position. This figure fell by 587,000 to 5.8 million in June, after an increase in May. This is the lowest figure since last October, and it has seen a steady decline since 2008 when part time roles spiked during the recession.
And as we mentioned, average hourly wages rose two cents to $25.61 after a six cent increase in May and an average increase of 2.6% over the last year. For nonsupervisory employees specifically, average hourly earnings rose to $21.51. While any increase in wages is welcome, for most workers the change is not yet significant enough to close the gap in income distribution. Some economists argue we need to see wage growth of at least 3% year over year to signal real strength in the labor market.
Who Was Hiring?
The job gains in June came from multiple industries, with leisure and hospitality, health care and financial activities leading the way. The leisure and hospitality industry overall hired 59,000 new workers, compared to a negligible change in payrolls last month. The biggest gains here came from food services and drinking places (+22,000) and performing arts and spectator sports (+14,000).
Health care and social assistance employers also added workers, with 58,000 new jobs in June. Most of these new employees found work in ambulatory health care services (+19,000), hospitals (+15,000), and child day care services (+15,000). And the financial services industry was hiring last month, increasing payrolls by 16,000. Companies that advertised open positions in June ranged from Unitedhealth Group and HM Health Solutions to Aflac and Wells Fargo.
The broad information sector saw payrolls increase by 44,000 in June. But this was largely explained by the end of the Verizon workers strike, and new jobs within the motion picture and sound recording industries (+11,000). Further gains came from professional and business services (+38,000), and retail trade (+30,000). Some employers in these industries who were hiring included T-Mobile, AT&T and Forever 21.
The only industry not hiring in June was mining, which lost about 6,000 jobs. Minimal changes occurred in construction, manufacturing, wholesale trade, transportation and warehousing, and government.
What Should Recruiters Expect Next Month?
The figures that come out in a few weeks for July may be very different, but by now recruiters should be prepared for such swings in the data. Hiring may slow down thanks to the economic uncertainties of the British vote to leave the European Union, or we may already be past that point.
Plus, the summer season brings more workers in the form of students looking for jobs to fill their time off. At the same time, vacation plans lead to some shifts in consumer spending, which in turn can impact the need for new employees in industries like retail and hospitality.
Recruiters should stay focused on the needs of their organization. If your company is growing and has jobs to fill, changes in the unemployment rate or global financial news shouldn’t prevent you from hiring. Instead, keep an eye on how the state of the labor market affects your general industry and your competitors. There may be opportunities to reach top talent when some of your peers are hesitating in the face of uncertainty.
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