The U.S. economy bounced back from the disastrous May print of 38,000 (and downward revision to 11,000) and beat market expectations by adding 287,000 jobs, the highest number since October 2015. The private sector hired 265,000. The unemployment rate rose to 4.9%.
In this bounce-back month, Dent Research finds a roughly even split of jobs added above and below the median wage (133,000 vs. 132,000). And while it’s tempting to put May’s disaster behind us and think that employment is back on track, the reality of middle wage jobs’ stagnancy remains inescapable.
Industries paying in the middle third of the wage scale accounted for just 8% of June’s job gains. In contrast, 49% of new jobs went to the lowest third on the wage scale. Hires by social services and bars and restaurants led the way. Each of those industries fall in the five lowest-paying jobs out of the 84 major industries we study each month. The highest third netted 43% of new jobs. Telecommunications added over 28,000 jobs, which appears to represents the end of the Verizon strike. Still, these jobs pay an average of $32.15 per hour.
Rodney Johnson, Dent Research President and Index creator said: “The big story this month is the snap back in job creation, even though the three-month average remains just under 150,000. However, lost in the news, is that the middle class is still under pressure.”
Each month Dent Research produces a detailed chart depicting where the job additions fall along the wage scale. This month, to illustrate the stubborn U-shaped wage recovery in jobs, we’re adding in a second chart:
The Dent Research Employment Index digs beneath the BLS’ headline numbers to measure the quality of jobs added each month. It provides a more complete picture of the job market by tracking where jobs are being created along the wage scale. For a more detailed explanation of our methodology, please click here to view our employment white paper.
About Dent Research
Dent Research is an economic forecasting and investment research firm and publisher that works diligently to provide you with the proprietary economic knowledge you need to accurately forecast what lies ahead in our economy so you can take the necessary and appropriate action to ensure prosperity in your business, investment and financial affairs.
The core of our work is what we call the Dent Method, which our founder and economic expert, Harry S. Dent Jr., developed in the late 1980s. It has the only documented record of success at forecasting long-term economic trends based on the study of and changes in demographic trends and their impact on our economy and the markets. It works by showing how predictable consumer-spending patterns, when combined with demographic trends, allow us to forecast the economy years or even decades in advance.
For more than two decades, readers and experts have trusted our independent economic think tank and research team to provide specialized and proprietary economic and investment research, analysis tools, and forecast information.
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