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On Friday, the Bureau of Labor Statistics released its latest monthly report on the state of the labor market.
According to the report, there were 206,000 new jobs created in June, mostly concentrated in government employment, health care, and social assistance. The retail trade and professional and business services sectors both lost jobs.
The labor market participation rate at 62.6 percent remained essentially unchanged both from May and from June 2023. The Biden White House highlighted that the prime-age labor force participation rate, however, is “at a 22 year high”: 83.7 percent.
These national statistics remain somewhat unrepresentative of the state of the labor market in Alabama, at least as of May. Alabama’s unemployment rate in May was only 3 percent, but its labor force participation rate was also significantly below the national average at 57.4 percent.
Besides unemployment and the total numbers of jobs, average hourly earnings also increased by 0.3 percent, or 10 cents an hour.
This means that average wage gains are still outpacing inflation, with the 3.9 percent increase in average hourly wages over the last 12 months remaining just over the year-over-year inflation rate of 3.3 percent.
While these numbers are preliminary and still subject to change, acting Secretary of Labor Julie Su said the jobs report “continues to show that President Biden’s economic strategy is delivering for American workers.”
However, despite the number of new jobs and continued wage gains, the latest report does seem to show the labor market may have begun to cool somewhat. In fact, the BLS revised their estimated total number of jobs added in April and May down significantly. April’s change in total payroll employment went from 165,000 to 108,000 jobs added and May’s change went from 272,000 to 218,000.
Preston Mui of Employ America wrote that while the changes in June were “mostly marginal,” the labor market is now “markedly weaker than it was 12 months ago.”
The unemployment rate last month at 4.1 percent was 0.5 points higher than the unemployment rate in June 2023. However, this is indicative of a gradual trend as there was only a 0.1 point increase between May and June.
Also pointing to slow declines in payroll growth, wage growth, and full-time employment, Mui continued to argue that the Federal Reserve should begin considering rate cuts. In his words, “we are starting to run out of room before further labor market cooling puts us short of full employment.”
State-level data on how the Alabama labor market behaved in June will be released on July 19.
