The June Employment Situation Was Remarkable - Plenty to Say
Workers Grew, Wages Rose. Hours, and worked increased from last year
The June Jobs Report, or Employment Situation Report, was remarkable. We saw the largest gain in full-time jobs since 2006 (See "June Jobs Report Records Record Employment, Jobs" ). We saw the worker data rise dramatically, non-seasonally adjusted, and improve nicely seasonally adjusted. Wages were up 3.84%, non-seasonally adjusted, while workers were up 1.65% and hours worked were up 4.87%. When all of this growth is combined gross wages were up 6.60% (See "June Workers, Hours Worked, and Wages Rose.") The big question that is normally asked in this column the week following the Jobs Report is "How is President Trump doing compared to former Presidents Reagan, Clinton, George W. Bush, and Obama?"
President Trump has seen 8.527 million full-time jobs created since his first month in office. He has also seen 1.225 million part-time jobs cut or replaced with some of those full-time jobs. Unemployment continues to be lower than when he took office even though it ticked slightly higher this month as people said that they were out of work and looking for work.
Former President Obama started his first year in a recession - and a jobs recession. He was also in a jobs recession. President Obama had 560,000 fewer full-time jobs than when he took office and 254,000 more part-time jobs. He also had 1.4 million more unemployed workers than when he took office. Full-time jobs lost versus full-time jobs added. Part-time jobs added versus part-time jobs cut. More unemployed workers versus fewer unemployed workers.
Former President Bush (GWB) had seen employment, full-time jobs and part-time jobs, improve during his first 29 months in office. The former President saw the creation of 2.157 million full-time jobs, the increase of 130,000 part-time jobs, and the increase of 3.0 million unemployed workers. He also inherited a recession from former President Clinton. We also had experienced September 11, 2001, or 911. This was June 2003, right before the former President oversaw 53 consecutive months of non-farm payroll "job creation." President Bush had a streak from August of 2003 through December of 2007 that went unappreciated at the time. This sister site to this one, "Reclaiming Common Sense" published an article September of 2014.
Former President Clinton added more jobs, fewer full-time jobs, than President Trump. The former President saw 7.277 million full-time jobs created during his first 29 months in office, plus 1.145 million part-time jobs. There was a total of 9.2 million jobs created. Former President Clinton also reduced his unemployment level by 2.4 million. President Trump and former President Clinton are the only two Presidents of the five to increase full-time jobs and reduce unemployment.
Former President Reagan oversaw the addition of full-time jobs, part-time jobs, and unemployed workers during his first 29 months in office. He also saw participation improve as did President Trump, former President Bush, and former President Clinton. Former President Reagan saw the creation of 3.0 million more full-time jobs, 661,000 part-time jobs, and 2.8 million more unemployed workers. He created 3.6 million jobs for 5.0 million workers.
The thing that is still lagging is the participation rate. The participation rate grew under former Presidents Reagan and Clinton, plateaued and diminished a little under former President GW Bush, and tumbled under former President Obama. The unemployed workers are participants and unemployment rate was "cut in Half" by the Obama administration. The problem is that if they do not find full-time or part-time work in the amount that become unemployed then the participation rate falls.
What is the effective unemployment rate? This column has created a metric to compare the unemployment rates and participation rates of different Presidents during the same month of the year called the U-7 unemployment rate. Former President Reagan had an unemployment rate of 10.20% and a participation rate of 65.12%. Former President Clinton was at 5.79% and 67.24%, President Trump is at 3.50% and 63.14%. If we compared the three Presidents with President Clinton's "best June" when he had a Participation rate of 67.72% and an unemployment rate of 4.14% then President Reagan's U-7 would have been 13.65% and President Trump's U-7 would be 10.02%. This is the eighth consecutive June decline in U-7. President Obama's worst June U-7 was June of 2011 when it hit 13.59%.
Would you rather have more unemployed workers and a higher participation rate? Right now we have a record level of full-time jobs, a record level of combined full-time jobs and part-time jobs, a record level of workers, and seriously low unemployment. Wages are rising. Hours worked are rising. Total Wages earned are rising. This should spur the economy to continue to grow. Last year we didn't even have peak jobs during July - that happened during the Christmas Season.
The May JOLTS Job Openings and Labor Turnover Report will be released tomorrow, July 9th. The data that is being discussed in this article is for the June Jobs Report. The JOLTS data lags the Jobs Report data by one month and one week. The Employment Situation Report is created using the CPS Jobs and Unemployment Data and the CES Worker and Wages data. The JOLTS data is a third data set. The JOLTS data is comparable to, not identical to, the CES data. There is a fourth data set, the continuing claims unemployment data, which is similar to the CPS U-3 Unemployment data. This is like comparing a Red Apple to a Red Anjou Pear, to a Pomegranate to a Tomato. All are red. All have seeds on the inside. All can be used to make juice drinks. They are not the same. They do not have the same sample sizes, nor do they measure the same things.
This data was good. It was remarkable. President Trump has created more full-time jobs after 29 months in office than the other four former Presidents. Former Presidents Reagan, Bush, and Obama saw unemployment higher after 29 months in office than when they were inaugurated. This is not getting much attention because the media report the CES worker data not the CPS jobs data. The media also reports the seasonally adjusted data not reality.
It's the Economy.
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