Almost a quarter-million more Americans were employed in June, decreasing the national unemployment rate to 5.3 percent, the U.S. Bureau of Labor Statistics reported July 2.
The U.S. labor market saw a gain of 223,000 jobs in areas of professional and business services, health care, retail trade, financial activities, and in transportation and warehousing.
African Americans continued to experience a jobless rate that almost doubled the national average and outpaced other groups though the rate did drop from 10.2 percent in May to 9.5 percent in June.
But, while the slight drop in Black and national unemployment rates—and the decline in the number of unemployed persons by 375,000 to 8.3 million—would seem like signals of a healthier economy, that is not necessarily the case, as labor force participation rates paint a different picture.
“This drop in unemployment was not primarily driven by a rise in employment; instead it was mostly due to a drop in the labor force,” said Elise Gould, an economist with the Economic Policy Institute, in an analysis posted on the group’s website. In fact, she added, the labor force actually saw a fall of 432,000 workers.
The White House, in a July 2 blog post, argues the decline could be attributed to an earlier-than-usual reference period—the week for which households report their labor force status in the Current Population Survey—resulting in the failure to capture the usual June jobs figures, which is usually driven by youth summer employment.
But, Gould argues, if you filter the data to reduce the impact of younger workers and retiring baby boomers, a clearer picture is presented of an economy that is still in recovery.
“The prime-age employment-to-population (EPOP) ratio has been flat for the last four months at 77.2 percent,” Gould wrote. “One would expect an improving economy to drive the prime-age EPOP upwards, and between October 2013 and February 2015 there was steady and decent progress on this front. But the recent stagnation has left prime-age EPOPs still far from fully recovered.”
Buttressing Gould’s assessment is the near-stagnation in the numbers of involuntary part-time workers—those who would prefer to work full-time but could not find a full-time position or saw their hours cut back. That number, currently at 6.5 million, changed little in June.
Also little unchanged was the 1.9 million jobless persons who wanted and were available for work, and who had sought employment sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.