WASHINGTON (MNI) - The U.S. May trade and latest labor market data suggest ongoing economic improvement.
The June employment report was strong, with payrolls up 288,000 and the May-April revisions totaling +29,000. The unemployment rate continued its decline, falling 0.2 point to 6.1%.
The civilian labor force advanced and the participation rate was steady, suggesting the improvement is real.
In one of the few weak spots, the Bureau of Labor Statistics noted involuntary part-time workers rose 275,000 during the month (we suspect this is related to summer jobs involving foods and recreation). This number jumped in March, steadied, fell in May, and now has surged. It might be reflecting weather and labor force gains more than underlying economic conditions.
Other background data were good as hours and earnings advanced.
These suggest rising incomes and production.
Payroll composition looked favorable, with broad gains: manufacturing posted +16,000, construction +6,000, finance +17,000, retail +40,200, temporary help +10,100, healthcare +33,700, restaurants +32,800, and local education +18,000 (government was +26,000 overall).
If there is any criticism of this strong report, it might be that the typical summer influx of new workers and school closings might be impacting the results. The unadjusted drop in local education jobs, for example, was -337,000, and the adjustment largely anticipated this move.
In more timely data, jobless claims rose 2,000 to 315,000 for the June 28 week, with no special factors. This level should be thought of as a steady state since the 4-week average also is 315,000. Claims averaged 320,000 earlier in the spring.
Continuing claims rose 11,000 to 2.579 million for the prior period.
These data suggest the labor market continues at a better pace. In coming periods, holidays, auto plant shut-downs and the usual summer volatility should muddy these data sets.
May's U.S. trade balance was slightly better than expected at -$44.4 billion, as imports and exports reversed their unusual April moves.
Imports fell $0.7 billion as there was a $2.1 billion plunge in crude imports on lower volume.
Exports rebounded $2 billion to the highest on record for goods.
Autos gained $778 million, gem diamonds rose +$418 million, and various electronics rose.
The balance improved from a revised -$47 billion in April as trade revived in North America and Asia.
Real trade in Q2 stands about 7% worse than the Q1 average, suggesting a subtraction from growth.
The seasonally adjusted balance with China was -$28.1 billion in May after -$28 billion in April. With Japan it was -$6.25 billion after -$5.3 billion, and with OPEC -$3.6 billion after -$5.5 billion. These breakdowns illustrate where the oil and autos originated.
The deficit with South Korea also reached a record at -$2.7 billion NSA, suggesting some auto imports might be originating there.
After adjustment, the South Korea deficit was -$2.2 billion after -$2 billion in April.