Private Sector Employment Up 176,000 in June

Although the U.S. Department of Labor Statistics reported today that only 80,000 jobs were created in June, employment in the U.S. nonfarm private business sector actually increased by 176,000 from May to June, on a seasonally adjusted basis. The estimated gain from April to May was revised up slightly, from the initial estimate of 133,000 to a revised estimate of 136,000. So why the difference? Government agencies — especially state and local — are shedding employees almost as fast as private sector employers are hiring them.

Employment in the private, service-providing sector rose 160,000 in June, after rising a revised 137,000 in May. Employment in the private, goods-producing sector added 16,000 jobs in June. Manufacturing employment added 4,000, reversing May’s decline.

Employment on large payrolls—those with 500 or more workers—increased 11,000 and employment on medium payrolls—those with 50 to 499 workers—rose 72,000 in June.

Employment on small payrolls—those with up to 49 workers—rose 93,000 that same period. Of the 72,000 jobs created by medium- sized payrolls, 7,000 jobs were created by the goods producing sector and 65,000 jobs were created by the service-providing sector.

Construction employment rose by 8,000 jobs, more than reversing the declines of the two previous months. The acceleration of employment since April does lend credence to the argument that unseasonably warm weather boosted employment during the winter months, with a “payback” spread over April and May.

The financial services sector added 11,000 jobs from May to June, extending this sector’s consecutive advances to eleven months.