The June jobs report is not a happy one as we head into the holiday weekend. Private-sector hiring is still weak, at less than 100,000 new jobs. Even worse, wages fell, and hours of work are flat in the last quarter. While hiring in temporary services is still increasing, it is at a lower level than the past nine months. The labor-market recovery is no longer strengthening but is instead holding in place since spring.
While the unemployment rate dipped to 9.5 percent, this is because there was a large exodus from the labor market. The overall labor market is now smaller than it was in March, another indication that the labor market simply is not strengthening. Surprisingly, adult women made up over 40 percent of the drop in the labor force, which means that the adult female labor pool is about the same as it was at the start of the calendar year. The pool of teenage workers dropped to its lowest level in 40 years, as teen-agers accounted for almost 40 percent of the overall labor-force decline.
This is a report of a labor market that is moving forward, albeit slowly and with some missteps. A double-dip recession is still unlikely, as most of the private sector, including manufacturing, continues to add jobs.