The Corner

With the Jobs Report, Fireworks Come Early

Looks like the labor market started its fireworks a little early. Payrolls grew 288,000 in June, the fifth straight month above 200,000. So far this year, payrolls have grown 231,000 per month, the fastest first half since 1999. 

The other good news was the decline in the unemployment rate to 6.1 percent, the lowest since September 2008. To put this in perspective, the Federal Reserve’s most recent economic forecast had the jobless rate at 6.1 percent near the end of the year, not the middle. The primary reason for the decline in the unemployment rate was a 407,000 gain in civilian employment, an alternative measure of jobs that includes small business start-ups.

One note of caution, however, is that the labor force only increased 81,000 in June and is down 128,000 from a year ago. As a result, the labor-force-participation rate remains mired at 62.8 percent, tied for the lowest since 1978.

The long-term downward trend in participation since 2000 is tied to the aging of the Baby Boom generation. But the end of extended unemployment insurance at the start of the year is also having an impact. Extended benefits kept some people from working and also kept others, who really didn’t intend to work, in the labor force (so they could keep getting benefits). The end of extended benefits should push down the jobless rate by both encouraging work among those who really want work and discouraging participation among those who really don’t. And, since the start of the year, we’ve had both faster payroll growth and a decline in the participation rate. Further supporting the case that ending extended benefits has helped: So far this year the median duration of unemployment has dropped to 13.1 weeks from 17.1 weeks, the steepest drop for any six months on record.

It’s hard to see the Fed not becoming more hawkish (or at least less dovish) after today’s report. The share of voluntary job leavers among the unemployed increased to 9 percent, the highest level since 2008. In the past, Fed chairman Janet Yellen has said a higher share of leavers shows confidence in the labor market.

Meanwhile, total hours worked and average hourly earnings were again up 0.2 percent each in June. Combined, this measure of total cash wages is up 4.1 percent in the past year, more than enough to fuel continued increases in consumer spending. In the past year nonfarm payrolls have grown at an average monthly rate of 208,000 while civilian employment is up 179,000 per month. Look for more solid jobs reports in the months ahead.

Most Popular

Film & TV

Why We Can’t Have Wakanda

SPOILERS AHEAD Black Panther is a really good movie that lives up to the hype in just about every way. Surely someone at Marvel Studios had an early doubt, reading the script and thinking: “Wait, we’re going to have hundreds of African warriors in brightly colored tribal garb, using ancient weapons, ... Read More
Law & the Courts

Obstruction Confusions

In his Lawfare critique of one of my several columns about the purported obstruction case against President Trump, Gabriel Schoenfeld loses me — as I suspect he will lose others — when he says of himself, “I do not think I am Trump-deranged.” Gabe graciously expresses fondness for me, and the feeling is ... Read More
Science & Tech

Set NASA Free

The Trump administration has proposed shifting the International Space Station from a NASA-exclusive research facility to a semi-public, semi-private one. Its plan would nix all government funding for the ISS by 2025 and award at least $150 million per year to NASA to help with the transition. This would be a ... Read More
Politics & Policy

Students’ Anti-Gun Views

Are children innocents or are they leaders? Are teenagers fully autonomous decision-makers, or are they lumps of mental clay, still being molded by unfolding brain development? The Left seems to have a particularly hard time deciding these days. Take, for example, the high-school students from Parkland, ... Read More
PC Culture

Kill Chic

We live in a society in which gratuitous violence is the trademark of video games, movies, and popular music. Kill this, shoot that in repugnant detail becomes a race to the visual and spoken bottom. We have gone from Sam Peckinpah’s realistic portrayal of violent death to a gory ritual of metal ripping ... Read More
Elections

Romney Is a Misfit for America

Mitt’s back. The former governor of Massachusetts and occasional native son of Michigan has a new persona: Mr. Utah. He’s going to bring Utah conservatism to the whole Republican party and to the country at large. Wholesome, efficient, industrious, faithful. “Utah has a lot to teach the politicians in ... Read More