July 2015 Jobs Report: 223k Jobs Added in June

Posted by Abby Alger on July 21, 2015


Overall, June was a good month for job seekers and the U.S. economy, although there are macro signs that the economic recovery has much room for improvement. According to the latest data from the U.S. Bureau of Labor Statistics (BLS), June added 223,000 jobs. That figure is less than the average monthly gain of 250,000 over the prior 12 months. In comparison, May added 280,000 jobs to the economy.

However, BLS recently revised both the April and May jobs numbers, reducing gains by 60,000 jobs—and that provides a softer view of the economy as previously reported by the agency.

Jobs Report for July 2015 - Chart Showing 223,000 New Jobs Added in June

Job Gains by Industry

Most of June’s job gains are found in the following industries:

  • Professional and business services (+64,000)
  • Healthcare (+40,000)
  • Retail trade (+33,000)
  • Financial activities (+20,000)
  • Transportation and warehousing (+17,000)

“Employment in professional and business services increased by 64,000 in June, about in line with the average monthly gain of 57,000 over the prior 12 months,” according to BLS’s July 2 report. “In June, employment continued to trend up in temporary help services (+20,000), in architectural and engineering services (+4,000), and in computer systems design and related services (+4,000).”

To put those numbers in perspective, the healthcare industry—which is one of the fastest growing sectors—added 40,000 jobs in June.

Labor Participation Rate Remains Low

BLS’s June data may portend a positive economic outlook in the near-term, but some caution would be prudent.

The unemployment rate—and how the government calculates it—officially declined by 0.2 percentage point to 5.3 percent in June. But more notably, the civilian labor force (the collective number of U.S. workers) actually declined by 432,000 in June. That’s a key trend because it means that nearly double the number of U.S. workers (compared to 223,000 job gains in June) left the labor pool for various reasons, including retirement but also due to cessation of job-seeking activities because of candidates’ inability to find a suitable job.

Thus, the labor force participation rate declined by 0.3 percentage point to 62.6 percent in June. This key indicator remains at historically low levels not seen since the late 1970s. And in absolute numbers, a record 93,626,000 Americans who are 16 years or older did not participate in the nation’s labor force in June.

More Businesses are Hiring Temporary Help

In professional and business services, more companies are turning to temporary help—such as freelancers, independent contractors, and seasonal and/or part-time workers—to meet business needs. Part of this trend is driven by considerations on cost structures for full-time employees, especially for small businesses.

Notably, about 40 percent of BLS’s data sample is comprised of business establishments with fewer than 20 employees. And it’s generally accepted that nearly, or over, 95% of new jobs are created by small- and mid-size firms.

In June, the gains from temporary help (in professional and business services) rose to 19,800 compared to an increase of 17,200 in May. In April 2015, those gains were significantly lower at 10,800.

Posted in: Jobs Reports, Monthly Economic Reports

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