The June jobs report released by the Labor Department on Thursday was on its face relatively strong, but media coverage tended to focus on its more negative aspects, particularly the withdrawal of large numbers of Americans from the labor force. Some outlets noted that manufacturing accounted for only 4,000 of the jobs created for the month.
The AP (7/2, Rugaber) reported that the nation’s employers added a “solid” 223,000 positions last month, while the unemployment rate fell to 5.3% from 5.5%. According to the article, the numbers “reflect a job market moving close to full health.” However, “other details were less encouraging,” the AP said, explaining that the decline in the unemployment rate was mainly because “many people out of work gave up on their job searches and were no longer counted as unemployed.”
The New York Times (7/3, Schwartz, Subscription Publication) said the joblessness rate dropped due to “an exodus of people from the work force.” In addition, “strong job gains” initially reported for April and May, “which had led many analysts to predict that the economy was picking up steam,” were adjusted downward by the Labor Department by 60,000 positions.
In Bloomberg News’ (7/2, Stilwell) estimation, the size of the labor force “tanked” in June, contributing to Thursday’s“very mixed” report. The drop in labor-force participation was “all the more surprising” because June “tends to be a month” in which “the US sees loads of people moving into the labor force.” Betsey Stevenson, a member of the White House Council of Economical Advisers, suggested in a blog post that technical factors may have contributed to the unexpected result.
NAM Chief Economist Chad Moutray, in a post on the association’s Shopfloor (7/2) blog, noted that the number of manufacturing jobs added last month “was slightly lower than the 7,000 additional employees added in May, and in general, it continues a softer-than-desired pace for the first half of 2015, particularly over the past five months.” He added, however, that the past two months brought “good news” in that manufacturing added jobs after “being flat in April.”
Transportation Pushes US Factory Orders Down More Than Expected. Reuters (7/2) cited Commerce Department data released Thursday showing that new orders for goods from US factories declined by a worse-than-expected 1.0% in May, largely due to soft demand for transportation and electrical equipment. Revised Commerce numbers put April’s factory orders at a 0.7% decline, Reuters said, noting that the category has fallen in nine of the past 10 months. The US manufacturing sector continues to cope with the export-battering impact of a strong dollar and cheaper crude oil, the story said.
The AP (7/2, Crutsinger), calling the latest factory-orders drop the steepest in three months, said much of May’s “weakness” was driven by a 35% “fall in demand for commercial aircraft,” a key part of the “volatile transportation category.” In durable goods, the decline in May was 2.2%, according to final Commerce numbers that were “even weaker than [the department’s] preliminary report last week.