GDP Still Growing
Still No Recession

Unemployment Still Low but Jobs Growth Slowing

Today's jobs report brings some good news but also some sobering reality.  First the good: the unemployment rate remains near its fifty-year low, coming in at just 3.6% for June.  The graph below shows the U.S. unemployment rate. 

Unemp 0623

Part of the reason the unemployment rate is so low is that the labor force participation rate (LFPR) is still historically low. So unemployment is low but many potential workers are still "sitting on the sidelines," and not part of the labor force. The LFPR in June was just 62.6 percent.  While this is up from 62.2% a year ago, it is still way down from the 63.3% we saw prior to COVID-19.

Now, the more sobering news. Nonfarm employment rose by 209,000 jobs in June. Ordinarily this would be seen as solid overall jobs growth, but it is the smallest increase in jobs since the end of 2020.  The graph below shows monthly changes in nonfarm employment since January 2021.  

Nfe 0623

In the period graphed above, there has been tremendous gains, but these gains seem to be slowing down over the past five months.