U.S. employers are adding jobs at a steady clip though the labor market is showing little sign of overheating, factors likely to reassure Federal Reserve officials as they weigh their first interest-rate increase since 2006.
We know that the economic recovery’s effects have been unevenly felt. The recovery has been kind to those who invested in certain stocks or whose title begins with the word “chief.” It’s been less charitable to certain groups, like African American workers, whose unemployment rates have lingered in the double-digits for most of the past eight years.
The voluminous literature on minimum wages offers little consensus on the extent to which a wage floor impacts employment. We argue that the minimum wage will impact employment over time, through changes in growth rather than an immediate drop in relative employment levels. We show that commonly-used specifications in this literature, especially those that include state-specific time trends, will not accurately capture these effects. Using three separate state panels of administrative employment data, we find that the minimum wage reduces job growth over a period of several years.
An important measure of layoffs hit its lowest mark since the Nixon administration, a sign of increasing momentum in the labor market and a possible hint at the extent of job growth for the full month of July.
California’s jobless rate dropped back to 6.3 percent in June after seeing a slight increase in May.
California reported an increase in new claims of 2,930. The state attributed the change to layoffs in the service industry.
The slight pullback in hiring during the first quarter from its exceedingly strong pace late last year dropped the 12-month pace of job gains to 2.94 million, a solid number but nevertheless the lowest annual figure since November.
U.S. employers added 223,000 jobs in June, while the unemployment rate fell to 5.3% from May’s 5.5%, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal had forecast a gain of 233,000 jobs and an unemployment rate of 5.4%.
“Small businesses took a breather from hiring last month after a string of five solid, positive months,” said NFIB Chief Economist William Dunkelberg. “Growth in the first few months of the year was lousy and big firms are beginning to show signs of wear and tear, layoffs are being announced and profits are fading.”
The U.S. job market sits at a crossroads six years into a fitful economic expansion: Hiring is strong, but weak wage growth has failed to pull millions of would-be workers off the sidelines while prompting others to drop out of the labor force.
Private companies in June created positions at the fastest clip this year, indicating a thaw in the labor market as summer began.
Data from the Bureau of Labor Statistics showed that the construction industry added jobs at the quickest pace over the past year, at 6.9%, followed by professional and business services at 5.1% and leisure and hospitality at 3.8%. The state’s slowest-growing industries over the past year were manufacturing, which grew jobs at a rate of 0.4%, and financial services, at 1%.
California reported the largest increase in claims of 10,917. The state attributed the change to layoffs in the service industry.
There was, however, a curious omission from the “wall of debt” three years ago – $10 billion in loans from the federal government to prop up the state’s Unemployment Insurance Fund that, like the budget as a whole, was battered by the Great Recession.
It’s noteworthy that May marked California’s third consecutive month of sub-3 percent year-over-year job growth, by ADP’s math. While it’s hard to complain about growth, the last time California payrolls expanded this slowly was the first three months of 2012.