The June jobs report from the Bureau of Labor Statistics is positive for more than one reason. To start, 288,000 jobs were added to payrolls last month. The unemployment rate fell to 6.1 percent making it the lowest since September 2008. These numbers are steps in the right direction in helping the economy reach its pre-Recession levels, however, in order to understand the jobs report completely, other factors need to be considered before we consider this a victory.
According to The Washington Post, the economy has added over 200,000 jobs for five months in a row for the first time since the early 2000s. In fact, The New York Times reports that 2.495 million jobs have been added in the past year: this number is important because it shows the significant number of people entering the workplace, but the figure is even more impressive because it is the largest number of jobs added in eight years. The amount of jobs added each month is accelerating, but the rate at which it is improving is not as spectacular as these numbers suggest.
As we know, the unemployment rate only includes those actively looking for work. “In June, the government reported that 2.7 percent of American adults said they were not actively looking for work, but they would still like a job now,” reported The New York Times. Nearly 2 percent of American adults fit this description in December 2007, showing that though progress is being made, it is not back to pre-Recession levels. Additionally, long-term unemployment has persisted, as one-third of the unemployed have been out of work for 27 weeks or longer.
Another report was published about the jobs added in June by the payroll processing firm ADP. ADP’s definition of a small business is a firm with fewer than 50 workers, contrasted with the Small Business Administration’s definition that allows up to 500 workers. Expanding the definition of small business from ADP’s definition of fewer than 50 employees to the SBA’s definition of fewer than 500 employees, small businesses added 117,000 jobs nationally in June making it a 60 percent increase from the average of the first five months of 2014. The Washington Post expanded the definition of small business from ADP’s fewer than 50 employees to the SBA’s definition of fewer than 500 employees, and the results showed that 83 percent of the job gains made in June were from small businesses. This means that small businesses are having a direct impact on the unemployment rate by adding this large number of jobs.
Taking all of these statistics into consideration, the amount of job gains made in the month of June is certainly a positive step for the economy, but critical issues such as long-term employment and the shrinking labor force need to be addressed.