Thread by @DanielAlpert

Good Jobs Day everyone. Today we see if the slow pace of reduction in continuing (not initial) extended and supplemented unemployment claims is again reflected in the #BLS data for June. Estimates for job growth of ~600K private and ~700K total sound reasonable, but its dicey.

If we get a big jump in jobs, we should see a slump in wages as most of the jobs seeking worker are low-wage/low-hours jobs. And they are not likely the type to draw in people off the bench from either the unemployed OR those who have left the labor force:
nytimes.com/2021/06/01/opi…

#BLS Non-farm payrolls rise by 850,000
The U-3 unemployment rate remains at 5.9%

Sorry U-3 up a little because of a small jump in the labor force. But labor force participation is flat at 61.6% and employment-population is flat too. Now let's dig in to the details.

470K of the 662K in private payroll growth is in leisure and hospitality (343K); retail (67K); administrative and waste (40K) and healthcare/social assistance (20K) - as low-wage/low-hours jobs wiped out during the pandemic are slowly being restored.

We'll be out with our @jobqualityindex #JQInstant read in a bit, but my guess is that it will show that we gained overwhelmingly in the restoration of low paying positions we can see that in the decline in weekly hours (1/10th) and the cresting of weekly income growth.

Hourly wages, which rose by a dime in June, should reverse between now and October as the millions of lower wage jobs left to be filled are restored. (Assuming that they are taken up!).

We should spend a moment to look at the dramatic explosion in government employment in June (up 188K). This was all in education at both the local and state levels as teachers returned to the classroom. The important thing to note is that this is impacted by seasonal adjustments>

>Normally, June begins to see teachers exit for vacation and the BLS smooths that out in its calculations to avoid volatility. But my guess is that June saw countervailing post-vaccine re-entry by some teachers in June that wrecked havoc with normal seasonal adjustments.

Thus the 224K aggregate rise in state and local education jobs may really have thrown off the headline #NFP number due to statistical reasons, not health of the economy.

Here's an interesting observation from the @jobqualityindex #JQInstant. It comes in at 46.16% for June. Even though most of the jobs added were in super-sectors that generally feature low-wage/low-hours jobs, the sub-sectors that filled jobs were those better paying...

There is a related measure here that I will draw your attention to. In June, production and non-supervisory jobs accounted for only 76% of new job formation, as opposed to the 85% level typically. So people are taking up the better paying management positions disproportionately.

And here is the revised @jobqualityindex for May (it runs with a one-month lag). As average incomes dance around with low-income jobs still remaining unfilled, the #JQI ticks up again by 0.39%. This will very-likely adjust itself out in the fall:

@jobqualityindex And that's a wrap on today's job's print. On the whole - especially if you throw out the distortion from those state and local education jobs, discussed above - pretty much as expected. But nothing to write home about given the millions of jobs and workers still displaced.

The full @jobqualityindex report for today can be found here:
bit.ly/2021JQIJune