Unemployment Lowest in 7 Years, Manufacturing Eases

July 2, 2015

By Evan Lockridge

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The nation’s unemployment rate fell 0.2 of a percent point in June to 5.3%, its lowest rate since April 2008, while 7,400 jobs were added in the for-hire trucking sector.

The wider transportation and warehousing sector saw 17,100 job additions.

According to a new Labor Department report, 223,000 non-farm jobs were added in June.

The overall increase was less than the 254,000 jobs added in May, which has been downwardly revised from 280,000. However, it was above April’s level of 187,000, revised downward from initially reported 221,000.

The June increase compares with an average monthly gain of 250,000 over the prior 12 months. Job gains during the month occurred in professional and business services, health care, retail trade, financial activities and transportation and warehousing.

On the downside, the report showed the labor participation rate in the country hit a 37-year low, meaning a lot of people have either given up looking for work or simply aren’t working. Average hourly wages rose at an annual rate of just 2% in June, barely ahead of government inflation numbers.

While the report was described as positive by Lindsey Piegza, chief economist at the investment firm Stifel, it also suggests significantly less momentum than previously anticipated heading into the second half of the year.

“The sizable drop in the unemployment rate was welcome, at least on the surface, but rather reflects a continued exodus of workers, with nearly half a million Americans saying, ‘Right now conditions in the U.S. labor market are so bad, I’m not going to bother looking for work.’ Remember, you have to be actively seeking employment to be counted as unemployed, thus, it is very easy to get the unemployment rate down to zero if no one is looking for a job,” she said.

Furthermore, Piegza said the anticipated rise in wages appears to have been “arrested with no growth at the end of June and the larger-than-expected increase in May partly revised away, leaving annual wages stagnant at 2% as they have been for the last 5 plus years.”

Factory orders and shipments

A separate report released Thursday by the Commerce department showed declines in new factory orders and shipments during May.

The full report, an update from an earlier advance one, showed new orders for manufactured goods fell 1% from the month before, the ninth drop out of the last 10 months.

New orders for manufactured durable goods fell 2.2%, more than the previously published 1.8% decline, and the third drop out of the last four months. It was led by a 6.5% decline in new transportation orders, also down three out of the last four months.

Shipments of manufactured goods fell 0.1% in May following a virtually unchanged April drop, while shipments of manufactured durable goods declined 0.3%, down from the previously published 0.1% drop, and the fourth decline out of the last five months.

It was led by a decline in transportation shipments, falling 0.9%, also down four out of the last five months.

Orders for non-defense capital goods excluding aircraft, an indicator of future business investment, were revised down to show a drop in May after a gain was earlier reported. Another key indictor, shipments of core capital goods. was revised down similarly.

However, there are other signs that the nation’s manufacturing sector may be starting to pick up some steam after being disappointing much of this year.

Earlier this week a survey of the nation’s supply management executives said factory activity hit its best level in five months.

These reports follow one from Thursday showing U.S. construction spending in May rose 0.8% from April, hitting its highest level since October 2008, according to the U.S. Commerce Department.

It said private construction spending also reached its highest level since July 2008 while spending on non-residential private projects was the best since December 2008 while public outlays for construction hit a seven-month high.


  1. 1. Cliff Downing [ July 06, 2015 @ 04:47AM ]

    Hard to believe that the "low" unemployment number is put out like it has any basis in truth. In June, while 223,000 jobs were created, the same report showed that over 400,000 people left the work force. That shows there was a net loss in actual jobs. They just don't count the folks who are not actively seeking employment, are underemployed, or who have been unemployed for a lengthy amount of time. David Stockman, former director of the Office of Management and Budget has analyzed the actual unemployment and places it at 42.9%. When you factor in all the folks that are conveniently left out of the equation to make the government numbers look good. At a bare minimum, the unemployment level is well over 20%. These are all Great Depression type of numbers. And it would coincide with the second assertion that factory orders are down and have been for several months. You don't have to be an economist to know we are in deep trouble.

  2. 2. CT [ July 06, 2015 @ 05:42AM ]

    This number is skewed since they are not counting the number of people who gave up looking for a job & don't report to unemployment. It also doesn't look at how many people's benefits expired and still don't have a job. Also, the "job" added are accounting as to how many are actually part-time jobs.
    The most recent figure estimated approximately over 93 million people don't have jobs yet there are approximately over 24 million foreigners who are employed here in the US. On top of that, Obama wants even more brought in on the HB-1 Visa program.
    Votes have consequences and unfortunately we are ALL reaping those consequences.
    Remember next election, proven track record on jobs, strong border, foreign relations, strong military, and a willingness to work with our traditional Allies; not our enemies...that's how you vote.


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