WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) rose to 81.29 in May, up 0.28% from the previous month, reflecting a rise in both high-quality and low-quality jobs.
The slight increase was the result in increases in high-quality jobs in construction and transport/warehousing, which were partially offset by an increase of 54,000 new jobs in the accommodation and food service industry, which is dominated by low-quality jobs.
The Bureau of Labor Statistics reported today that the U.S. added 372,000 workers to nonfarm payrolls in June, with the unemployment rate remaining at 3.6%. The labor force participation rate fell slightly to 62.2%. Notably, private sector employment has now fully recovered from the pandemic, with private sector employment 140,000 higher than in February 2020. However, government employee totals were 664,000 below the February 2020 level. Manufacturing employment rose by 29,000 in June to reach a total of 12.797 million. The manufacturing sector has now recovered from the Covid pandemic, as the June figure is 2,000 jobs higher than the December 2019 manufacturing employment total.
Over the 12 months to June, average hourly earnings for all employees have risen 5.1% according to BLS data published today, suggesting that the average employee continues to suffer small losses in real income as inflation raises the cost of consumer goods by around 8% a year. However, the strong employment figures, the low unemployment rate, and the relatively robust earnings figures from major corporations suggest the Federal Reserve will continue with its policy of raising interest rates to put the brakes on inflation, with the unavoidable byproduct of reducing economic growth. Earnings guidance for the second quarter shows large profit increases expected by energy companies but reductions in earnings for consumer-oriented companies including Amazon and Target.
“As the administration works to fight inflation, it should be mindful that supply-side inflation has been driven by dependence on imported products like semiconductors and household appliances, where we are dependent on small numbers of suppliers typically located in one or two far-off countries,” said CPA chief economist Jeff Ferry. “Actions to bring home our supply chains and diversify sources of supply will reduce inflationary pressures in the economy.”
The Job Quality Index measures job quality for U.S. production and non-supervisory workers by comparing workers’ weekly wages to the mean weekly wage for all non-supervisory workers. Those jobs above the mean are classified as high-quality and those below the mean are low-quality.
