Weekly Economic Trends and Indicators

The Headline:

On July 7, the Bureau of Labor Statistics (BLS) reported that payrolls increased by 209,000 nationwide during the month of June, and the unemployment rate decreased slightly to 3.6%. Here in the Quad Cities, the latest job figures from the BLS showed an increase of 2500 jobs locally while the unemployment rate increased from 3.5% to 3.9% during the month of May.

The Details:

Once again, local job gains were concentrated in some specific areas. Leisure and hospitality added 1000 jobs in May as the busy summer season began. Leisure and hospitality jobs were up 9.7% from last May, representing the largest percentage gain of any sector over the last year. Government employment increased by 500 in May continuing a steady pace back toward pre-COVID levels. Professional and business services, which had fallen sharply (1000 jobs) in January, have rebounded by 700 jobs since then (500 of them in May). Manufacturing jobs were level in May, but up 300 since a year ago and stand close to a fifteen-year high.

The Context:

The national employment report was somewhat below expectations. With a few isolated exceptions, job growth has been trending down slowly but steadily over the last year as the Fed’s interest rate increases have started to take effect. Even so, these numbers are historically good, and measures such as labor force participation continue to run below pre-COVID trends, indicating that there is room for growth even as inflation returns to normal. The financial markets were not overly concerned about the job market with the major indexes continuing their upward climb in the week that followed.

Locally, the job market continues to be strong. Like the national market, the local market continues to make a slow but steady recovery from COVID. Labor force participation, both locally and nationally, has been slow to bounce back. The last couple of months have been encouraging with increases in the local labor force of 500 in April and 700 in May. The slight increase in unemployment can be attributed to those entrants into the labor force. A recession seems somewhat less likely to many analysts as inflation continues to retreat without serious repercussions to the labor market. Still, the second half of the year bears close watching.

Next week: Inflation update