Weak job numbers for June; U.S. economy added 18,000 jobs

I was prepared to write an upbeat post this morning about some of the week’s economic data, including this morning’s jobs report, which was widely expected to show a respectable increase.

Those expectations were based on some pretty good data — including slight declines in applications for unemployment insurance and good numbers earlier this week from ADP in its estimation of private payrolls.

But the economy added just 18,000 jobs in June (seasonally adjusted) according to the Bureau of Labor Statistics, and May’s meager 54,000 was revised down to 25,000. (I’m not really a stock market watcher, but I’d expect stocks to fall off a cliff for an hour or two this morning.) The U.S. economy needs to add about 120,000 jobs per month just to keep up with population growth. The private sector added 57,000 jobs, but local, state, and federal government cut 39,000.

The unemployment rate has ticked up only to 9.2%, but the underlying data that I’ve seen so far at the WSJ website is terrible. 272,000 Americans dropped out of the labor force in June; the number of temporary jobs (often seen as a precursor to permanent jobs) fell by 12,000; relatively strong growth in leisure and hospitality — 34,000 jobs — but those are typically lower wage positions; the labor force participation rate is the lowest it’s been since 1984.

Here’s an updated graph from Calculated Risk that shows the severity of the job losses during the recession and the very slow recovery, which is nowhere near fast enough to make up for population growth:

More later on this.