July 5, 2024

Private sector employment for June rose 136 thousand following downward revised gains in May ot 193 thousand and 108 thousand in April.  In the past three months the average increase has been 146 thousand.  The employment gains are clearly slowing down, but at 146 thousand they are roughly in line with growth in the labor force which suggests that the labor market will remain at full employment for a number of months to come.

In addition to hiring workers employers can also alter the length of the workweek for their existing workers.  The nonfarm workweek was unchanged in June at 34.3 hours after having been unchanged at 34.3 hours in both April and May.  The workweek seems to be settling in at 34.3 hours which is about the same length that it was prior to the recession.

Job openings have fallen from a record high level of 11.7 million in early 2021 to 8.1 million, but firms continue to have some difficulty filling open positions.  Prior to the recession there were about 7.0 million job openings per month versus 8.1 million currently. Today there are 1.2 job openings for every unemployed worker which is abnormally high.  The demand for labor continues to outpace supply.

The change in employment and hours worked are reflected in the aggregate hours index which rose 0.1% in June to 116.5 after having risen 0.2% in May after having fallen 0.2% in April.  This index increased 1.6% in the second quarter which we believe is reasonably consistent with our projected 2.0% GDP growth rate for that quarter.

Construction employment rose by 27 thousand.   Manufacturing employment fell 8 thousand.  Retail trade jobs declined by 9 thousand.  Transportation and warehousing rose by 7 thousand.  Info tech jobs gained 6 thousand.  Financial sector jobs rose 9 thousand.  Professional and business services fell 17 thousand.   . Health care jobs gained 49 thousand.   Social assistance climbed by 34 thousand.  Leisure and hospitality jobs climbed by 7 thousand.    Government jobs rose by 70 thousand almost exclusively at the state and local level.

Given these steady employment gains we expect GDP growth of 2.0% in the second quarter to be followed by 1.7% growth in the third and fourth quarters.

Stephen Slifer


Charleston, S.C.