4 Things to Know About June's Jobs Report

Bad news for the end-of-the-world crowd: June's jobs report was released Friday, and it was pretty good. 195,000 new jobs were created last month, according to the Bureau of Labor Statistics. That was the third-best June jobs report in the last 15 years. May and April's jobs numbers were revised higher by a combined 70,000 jobs. Both the S&P 500 and interest rates jumped, though both were looking up before the report was released.

Here are four things know about the jobs report.

1. Average jobs growth is almost, sort of, decent
Any monthly jobs report is noisy and prone to revision. A better gauge is the rolling six-month average, which shows jobs growth of about 200,000 a month. That isn't great -- we need a little more than 100,000 jobs a month just to keep up with population growth -- but it's near the high of what the economy has been able to produce over the last decade:

Source: Bureau of Labor Statistics.

2. Revisions have been almost as important as the original jobs reports
Each jobs report is revised seven times -- twice in the two months after the original report, and once a year for five years thereafter. (There's nothing fishy about this; the BLS is constantly getting new data to revise its assumptions).

Revisions tend to be positive during a recovery and subtractive during a recession. Good news: Revisions during the last few months have been universally higher. By quite a bit, too:

Source: Bureau of Labor Statistics.

3. Not all jobs are created equal
Any job is better than no job. But not all jobs are created equal, and a big portion of jobs created in recent months have come from notoriously low-wage sectors. Leisure and hospitality accounted for 42% of June's gain. Of that segment, 52,000 jobs came from the "food services and drinking places" subsector. Retail jobs increased by 37,000. Meanwhile, manufacturing employment fell by 6,000.

Hordes of previously unemployed Americans may be rejoining the workforce, but still worse off than they were a few years ago. We are recovering, but not recovered.

4. It's still going to take a while to get back to normal
The Federal Reserve Bank of Atlanta has an online jobs calculator that lets you play around with different assumptions to see when the jobs market might be back to normal.

If we stay at the current rate of job creation, the unemployment rate will drop to 6% in about two years, and 5% by about 2017. By then, we'd by a full decade out from the beginning of the last recession, which is longer than it took for the job market to recover after the Great Depression (although that recover was boosted by World War II). We are dealing with nothing short of a historic disaster. June's jobs report doesn't change that.

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