Economic Snapshot: Unemployment rises, job openings fall

This month’s jobs report is less positive than past months, with the number of unemployed persons increasing in June and the number of job openings decreasing on the last business day of May.

Employment situation

Total nonfarm payroll employment increased by 287,000 jobs and the unemployment rate rose by 0.2 percentage points to 4.9 percent in June. The number of unemployed persons increased by 347,000 to 7.8 million. These increases largely offset declines in May and brought both the unemployment rate and the number of unemployed persons back in line with levels from August 2015 to April.

The number of long-term unemployed persons changed little in June at 2.0 million and accounted for 25.8 percent of the unemployed. The number of persons employed part time for economic reasons decreased by 587,000 to 5.8 million in June, offsetting May’s increase.

In June, 1.8 million persons were marginally attached to the labor force, unchanged from the previous year. Among the marginally attached, there were 502,000 discouraged workers in June, down by 151,000 from June 2015.

JOLTS

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The number of job openings decreased by 345,000 to 5.5 million on the last business day in May. The prior three-month average change in job openings was +80,000. The job openings rate in May was 3.7 percent.

The number of job openings decreased for total private and was little changed for government. Job openings decreased in a number of industries, with the largest changes occurring in wholesale trade (-104,000), other services (-98,000), and real estate and rental and leasing (-53,000). In the regions, job openings decreased in the South and Midwest.

The number of hires was little changed at 5.0 million in May and the hires rate was 3.5 percent. The number of hires was little changed for total private and for government, and was little changed in all industries and regions.

There were 5.0 million total separations in May, little changed from April, and the total separations rate was 3.4 percent. Total separations decreased in state and local government education (-17,000) and in federal government (-8,000).

Among separations, the number of quits was little changed at 2.9 million and the quits rate was 2.0 percent. Over the month, the number of quits was little changed for total private and for government. Quits increased in educational services (+17,000) and in the Northeast region.

NFIB small business optimism index

Small business optimism rose 0.7 points in June to 94.5, according to the National Federation of Independent Business. The NFIB says this is a negligible increase showing no real enthusiasm for making capital outlays, increasing inventories or expanding. The index remains well below the 42-year average of 98.

Four of the 10 index components posted a gain, three declined and three were unchanged. The biggest increase was Expected Business Conditions, which rose four points. The NFIB says this is a good sign but more owners still expect conditions to worsen than expect improvement.

Fifty-six percent reported hiring or trying to hire, which is unchanged, but 48 percent reported few or no qualified applicants for the positions they were trying to fill. Fifteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem and the highest reading in this expansion. The issue ranks third out of nine possible issued listed. Twenty-nine percent of all owners reported job openings they could not fill in the current period, up 2 points, the highest reading in this expansion.

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