The employment picture brightened somewhat in June, with 288,000 new jobs (up from a revised 224,000 in May) and a decline in the unemployment rate to 6.1 percent from 6.3. That’s the lowest unemployment rate since August 2008, on the eve of the financial crisis. We have now had job growth above 200,000 for the last five months, the first time that has happened since the very prosperous years of the late 1990s. The number of long-term unemployed (over 27 weeks) declined by 293,000. Unemployment among African-Americans fell from 11.5 percent to 10.7.
But the picture was not all bright. The number of involuntary part-time workers increased by 275,000. Teenage unemployment increased to 21 percent. Among black teenagers it was a horrendous 33.4 percent, up from 31.1 percent in May. One in three black teenagers in the labor force are unemployed. The participation rate stayed steady at 62.8 percent for the third month in a row. But that is down from a year ago, when it was 64 percent and way down from before the recession. So much of the drop in unemployment came from people dropping out of the labor force, not finding jobs.
And many of the new jobs were at the low end of the pay scale. While retail jobs increased by 40,000 and leisure and hospitality 39,000, higher-paying jobs in manufacturing (16,000) and construction (6,000) were far fewer.
So while the news is good, it is not unalloyed good. We’ll know we are finally in a full-fledged recovery when the participation rate begins to climb steadily as discouraged workers see more opportunity and begin looking for jobs. That might send the unemployment rate up at first, but that, paradoxically, would actually be good news.