Continuing our ongoing coverage of the labor market, the July Employment Situation release from the Bureau of Labor Statistics continues to suggests that the labor market has stabilized, with the tightening of the first half of the year tapering off. The headline U-3 unemployment rate recovered 0.1% to return to May’s level, and the U-6 “underemployment” rate remained unchanged at a level slightly above its May low. This consistent with the Federal Reserve’s decision to leave interest rates unchanged in July.
|U-3 Unemployment Rate||4.8%||4.4%||4.3%||-0.5%|
|U-6 Unemployment Rate||9.4%||8.6%||8.6%||-0.8%|
|Civilian Noninstitutional Population*||254,082||254,957||255,151||+1,069|
|Civilian Labor Force||159,716||160,145||160,494||+778|
|Part-time for Economic Reasons||5,840||5,326||5,282||-558|
|Marginally Attached to Workforce||1,752||1,582||1,629||-123|
|* All numbers are in thousands|
While the general trend is stable, the loss of all improvement in the discouraged workers since the start of the year, as well as the rise in marginally attached workers is a little disturbing. However, given the typical spread between the U-3 and U-6, it’s probably appropriate to consider this noise given the otherwise positive tone of the year. As long as the Fed holds off on interest rate increases and the White House doesn’t precipitate any major economic crises by bungling the budget or debt limit processes (or declaring major trade or conventional wars), the labor market will probably remain healthy for the near future.