MNI DATA REACT: US Adds Record 4.8M Jobs in June; U-Rate 11.1%

By Brooke Migdon

     WASHINGTON (MNI) - The U.S. economy added a record-shattering 4.8 million

jobs in June, nearly doubling May's upwardly revised 2.7 million gain and

surpassing market expectations by more than 1 million jobs as economic activity

resumed for a second month, the Bureau of Labor Statistics said Thursday.

     The unemployment rate fell to 11.1% from 13.3% in May, though recent

business closures in populous states like Texas, Florida and California mean

that number has already moved higher. The BLS's data focused on the first half

of the month. 

     A survey misclassification error that has skewed unemployment figures since

March was again acknowledged by the BLS commissioner, who said the true rate of

unemployment may be 1 percentage point higher not including seasonal adjustment.

But the BLS said the degree of misclassification in June had declined

"considerably" and the 1 percentage point addition to the unemployment rate

represents the "upper bound of our estimate" and likely "overstates the size of

the misclassification error." A joint BLS and Census Bureau investigation into

the misclassification of "unemployed on temporary layoff" workers as "employed

but absent from work" is ongoing.

     --LEISURE AND HOSPITALITY LEADS

     Total private payrolls rose by 4.8 million in June, led by job gains in

service-producing industries like leisure and hospitality (+2.1 million), which

accounted for two-fifths of the overall gain. Other notable increases came from

retail trade (+739,800), education and health services (+568,000), manufacturing

(+356,000) and professional and business services (+306,000).

     Net revisions for the previous two months were a positive 90,000, bringing

the three-month average loss to 4.4 million through June. Job gains in May and

June still account for less than 35% of the 22 million jobs lost since March. 

     The labor force participation rate inched up to 61.5% from 60.8% in May and

the employment-to-population ratio surged to 54.6% after inching up to 52.8% in

May. The U-6 rate, which captures discouraged workers, dived to 18.0% from 21.2%

in May. But permanent job losers rose to 2.9 million from 2.3 million a month

earlier. 

     The length of the average work week fell by two-tenths to 34.5 hours from

34.7 in May. Average hourly earnings fell by 1.2% in June following a 1.0%

decline in May. From a year earlier, earnings rose 4.7%.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

[TOPICS: MAUDS$,M$U$$$,MT$$$$]