Economy Watch: Most Industries Create Few Jobs in June

By Dees Stribling, Contributing Editor

June’s weak employment numbers (a net increase of 80,000 jobs) capped a weak quarter for U.S. job growth. According to the Bureau of Labor Statistics (BLS), average job growth was only 75,000 per month during the second quarter of 2012, factoring in revisions in previous months. That compares with a net increase of 226,000 new jobs per month during the first quarter of this year.

Professional and business services added jobs (up 47,000) during June, while healthcare added 13,000 positions and manufacturing added 11,000, but most other major industries did little net hiring. Employment in construction; retail; transportation and warehousing; mining and logging; financial services; leisure and hospitality; and government, for example, showed little or no change for the month.

The number of unemployed persons nationwide—12.7 million—was essentially unchanged in June, noted the BLS, accounting for the static unemployment rate of 8.2 percent. The number of long-term unemployed persons, which by BLS reckoning means those jobless for 27 weeks and longer, didn’t budge during the month, coming in at 5.4 million. The people who were unemployed for the long term accounted for 41.9 percent of the unemployed.

Rail shipments down, intermodal shipments up

The Association of American Railroads (AAR) said on Friday that the number of U.S. rail carloads, which is a lesser-known indicator of economic activity, that originated in June 2012 totaled about 1.14 million, down 1.3 percent compared with June 2011. That might point to a sluggish economy, though it was also the lowest percentage year-over-year decline for rail carload activity in five months, mainly because coal carloads weren’t as lousy as they have been recently.

On the other hand, the association also said that intermodal volume in June totaled just over 996,000 containers and trailers, up 5.2 percent compared with June 2011, which might point to a more active economy. So for June, at least, the indicators are mixed when it comes to rail activity—or it may be that shippers are using intermodal more than ever for various reasons. AAR reported that the June 2012 average weekly intermodal volume was just over 249,000 units, the highest average for any June on record and the third highest for any month, behind August and October 2006.

“U.S. intermodal originations in 2012 through June are slightly ahead of 2006’s record pace, setting up the very real possibility that 2012 will be the highest-volume intermodal year ever for U.S. railroads,” AAR senior vice president John T. Gray noted in a press statement. “The recovery in intermodal traffic since the recession has been remarkable and is due in large part to railroads’ huge investments in their intermodal business that have improved rail intermodal’s efficiency.”

U.S. retail vacancy edges down

Reis Inc. reported on Friday that the vacancy rate for regional U.S. malls dropped to 8.9 percent in the second quarter of 2012, compared with 9 percent during 1Q12. For neighborhood and community centers, the quarter-over-quarter drop was 10.9 percent to 10.8 percent.

Essentially, then, retail property markets are stagnant. Demand for space is quite weak, but not very much retail space is being built, so that allows vacancies to edge down a bit. According to Reis, only 572,000 square feet of neighborhood and community centers came on line nationwide during the second quarter, the second-lowest total on record since the company began tracking the U.S. retail market in 1999.

Wall Street reacted in predictable dour fashion to the weak jobs report on Friday, with the Dow Jones Industrial Average declining 124.2 points, or 0.96 percent. The S&P 500 was down 0.94 percent and the Nasdaq dropped 1.3 percent.