June’s Jobs Report – Still Solid After All These Months

For 29 consecutive months – January 2021 through May 2023 – two things happened, and they happened every one of those months.

One, the job market created more jobs – far more jobs, in most cases – than economists, labor analysts, and other “experts” predicted.

Two, when the numbers were released by the Bureau of Labor Statistics early the following months, everyone was surprised. not only because the market exceeded expectations – again! – but by how much. In fact, most of those monthly reports brought more than surprises; the “experts” were downright stopped in their tracks. Month after month, I kept asking myself, “When are they going to get it?” This is the greatest, strongest job market in history – and the one with the longest sustained high-level growth ever recorded. And you’d figure that after a while, they’d see what’s going on.

Right.

So, along comes last month – June, month #30 in this saga – and the job creation number comes in at 209,000, considerably lower than the 286,000 average for this year, and noticeably down from the half million monthly average since January 2021. And as those “experts” had predicted 240,000, all of a sudden, things changed. Now they’re talking in disappointed terms. After 29 months of the market exceeding expectations, now it’s falling short. Talking about looking through the wrong end of the telescope!

About those 209,000 new jobs…

Time for a little common sense. Let’s not get out of focus in just one month: 209,000 jobs created is still a very healthy number. Anyone who doesn’t have that focus needs to get realigned, on a number of counts. First, it’s a good number all by itself.

Second, in relative terms, it’s also good. Our civilian labor force grew by 2.9 million over the last 12 months, currently sitting at 167 million. That’s almost exactly half our total population, which means that to keep up with population growth, (births minus deaths plus immigration) we’d need to add 1.45 million jobs per year, or 120,000 per month. We’ve already done that as of May, but to stay focused on June alone, that 209K is looking good.

Third, the kind of explosive growth we’ve witnessed for 30 months had to level off sooner or later. Given that the job growth over the past 30 months was equitably spread out among job sectors, we can reasonably expect continued strength. There are no weak points, in other words. Not only that, but major accomplishments like the CHIPS Act, the Infrastructure Bill, and the American Rescue Plan have only just begun to kick in to job growth.

Fuher, the unemployment rate ticked down from 3.7% to 3.6%, not notable, but more granularly, of the multitude of factors determining that rate, two are meaningful right now: the number of newly-employed workers (273,000, bringing the ranks of the employed to its highest level ever) nearly doubled the number of newly-unemployed workers (140,000).

“Where have you gone, Joe DiMaggio?”

This whole thing – and especially the way those “experts” see it – kind of reminds me of Joe DiMaggio’s famed 56-game hitting streak in 1941. One of baseball’s most hallowed records began in the first inning of a Yankee game on May 15, 1941, when DiMaggio hit a first-inning single. For the next two months and a day, through 223 at-bats that yielded 91 hits, Joltin’ Joe held the attention of Americans (and others) until, on July 16, it was over. One of America’s most gripping dramas was over – and everyone exhaled.

Know wat DiMaggio did the day after his first hitless game in two months? He started what turned out to be a new 17-game hitting streak.

Know wp that mind when you read the job numbers.