The Morning Dispatch: A Strong June Jobs Report

Happy Tuesday! We hope you had a wonderful Independence Day weekend and ate enough hot dogs and hamburgers to sedate a medium-sized horse.

Quick Hits: Today’s Top Stories

• The U.S. economy added a net 850,000 jobs in June, according to the Bureau of Labor Statistics, with the unemployment rate ticking up to 5.9 percent from 5.8 percent in May. The 850,000 jobs are the most added in one month since last August.

• Johnson & Johnson released data demonstrating that its coronavirus vaccine produced “strong, persistent activity” against the Delta variant and other SARS-CoV-2 variants. The studies also noted that the antibody response lasted at least eight months.

• U.S. forces fully vacated Bagram Air Base in Afghanistan, clearing the way for the Afghan army to take control of the premises. Meanwhile, more than 1,000 Afghan troops fled into Tajikistan after a Taliban offensive in northern Afghanistan.

• City officials ordered the demolition of what remained of the Surfside, Florida, condominium Sunday, 10 days after its collapse on June 24. The official death toll had risen to 28 as of Monday evening, and approximately 117 remained unaccounted for as the demolition clears the way for search and rescue teams.

• British Prime Minister Boris Johnson announced plans Monday to lift the country’s COVID-19 lockdown rules over the course of the next two weeks, ending formal mask mandates, work from home guidelines, and social distancing protocols. The loosening restrictions are expected to be the first real world trial of the coronavirus vaccines’ efficacy against the Delta variant. 

• Cybercriminal group REvil breached Miami-based IT software company Kaseya Friday, demanding $70 million in what could be the second largest ransomware attack to date.

• Outgoing Texas GOP Chairman Allen West officially threw his hat into the ring for governor Sunday, raising a challenge to incumbent Republican Gov. Greg Abbott’s candidacy.

June Jobs Report: That’s More Like It

The past few times we’ve written to you about the United States’ employment situation, the stories have been a bit of a bummer. Analysts expected about 1 million jobs to be added in April as the country began to vaccinate its way out of the pandemic, but only about 269,000 came through. May was a bit better, but still fell short of expectations, with 583,000 jobs added rather than the anticipated 671,000.

But the consumer confidence index—a measure of how average Americans view their economic outlook—soared to a 16-month high last week, and the country got some data late last week to back up this optimism.

U.S. employers added a net 850,000 jobs in June, according to a Bureau of Labor Statistics (BLS) report released Friday, outpacing the consensus expectation of 706,000 for the month. The U.S. has now added jobs on net for six straight months, and June’s figure was the largest since employers created slightly more than 1.5 million jobs last August. The unemployment rate actually ticked up a hair—from 5.8 percent to 5.9 percent—but that was largely because about 150,000 people entered (or re-entered) the labor force in June, increasing the denominator in the unemployment rate calculation.

A significant portion of the job gain was concentrated in the leisure and hospitality sector, with employment in restaurants, bars, and entertainment/recreation facilities rising by 343,000 month-over-month. The education, professional and business services, retail, and social assistance industries also experienced boosts, while employment in construction, courier/messenger services, and motor vehicle manufacturing contracted slightly.

But beyond the topline numbers, Friday’s jobs report demonstrated that—with there still being millions of job openings employers nationwide are struggling to fill—we’re in an exceedingly tight labor market. While the length of an average workweek fell slightly from 34.8 hours to 34.7, average hourly earnings increased another $0.10 to $30.40 from May to June, bringing year-over-year wage growth to 3.6 percent. Data from ZipRecruiter, a job/hiring search firm, found that about 20 percent of all job listings in June included some sort of signing bonus, up from just 2 percent in March.

“Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers,” President Joe Biden said in remarks Friday touting the report. “That kind of competition in the market doesn’t just give workers more ability to earn higher wages; it also gives them the power to demand to be treated with dignity and respect in the workplace.”

A confluence of factors have contributed to this acceleration in hiring. With 58.2 percent of U.S. adults now fully vaccinated, the number of Americans not looking for work due to coronavirus concerns dropped from 2.5 million in May to 1.6 million in June. A recent analysis from Jefferies LLC economists found that unemployed workers are finding jobs more quickly in the 25-or-so states that ended bonus federal unemployment benefits earlier than their September expiration date.

Biden, not surprisingly, attributed the good news to his own policies. “This is historic progress pulling our economy out of the worst crisis in 100 years, driven in part by our dramatic progress in vaccinating our nation and beating back the pandemic, as well as other elements of the American Rescue Plan,” he said in his remarks Friday. “None of this happened by accident. Again, it’s a direct result of the American Rescue Plan. And at the time, people questioned whether or not we should do that, even though we didn’t have bipartisan support. Well, it worked.”

But Friday’s report wasn’t all rainbows and lollipops. We still have a long way to go (approximately 6.7 million jobs) before reaching February 2020 levels of employment once again, and the number of long-term unemployed (out-of-work for at least 27 consecutive weeks) increased by 233,000 in June, now comprising about 42 percent of the total unemployed. Wages may be growing, but rising inflation is going to take a significant bite out of those yields, if not cancel them out entirely. The labor force grew by about 150,000 last month, but the participation rate held steady at 61.6 percent, well below the 63.4 percent in January 2020.

The retiring Rep. Kevin Brady—the top Republican on the House Ways and Means Committee—pointed to some of these concerns in a tweet on Friday. “MORE TROUBLING SIGNS: June jobs report,” it reads. “Long-term unemployment worsened. Unemployment for ALL MINORITIES & LESS EDUCATED worsened. Construction jobs shrank. Labor-force rate: still poor.”

But Tony Fratto—a top Treasury Department and White House official in the George W. Bush administration—argued naysayers were straining a little too hard to criticize the report: “I know it’s fun to find the dark clouds behind every silver lining, but there’s no such thing as a bad jobs report that adds 850k jobs. That’s not a thing.”

West Coast in for a Long Wildfire Season

Longtime TMD readers may remember the name James Sutton; he was one of The Dispatch’s first-ever interns. After months away, he makes his triumphant return to our pages this morning with a piece looking at the West Coast’s upcoming wildfire season, which has the potential to be one of the worst on record.

Didn’t we just have a crazy wildfire season last year?

Yes. Last August and September, Americans were treated to images that seemed straight out of a science fiction movie (or the Book of Revelation), as massive wildfires turned skies an unsettling orange across many parts of California and Oregon. It was one of the most destructive wildfire seasons ever for the West, destroying $16.5 billion in property (including about 10,000 buildings) and costing more than $3 billion to suppress.

Why might this year’s season be worse?

Twin accelerants—extreme heat and a lack of water—threaten to make the western United States a veritable tinderbox.

The region has had a hot start to the summer, to say the least. Residents of the Pacific Northwest have dealt with record-setting temperatures: Portland saw its three hottest days ever from June 26-28. Temperatures climbed above 100 degrees Fahrenheit in a city that typically sees highs in the upper 70s in June. It was the result of a “heat dome,” a high-pressure system inhibiting the rise of hot air, pushing it down and making the atmosphere denser and hotter. The “dome” in the Northwest comes after a succession of other heat waves throughout the American West in early and late June, stretching from Wyoming to California. 

If temperatures hot enough to shut down public transit and buckle freeways weren’t enough, the West is also facing a historic drought, the worst and most widespread in decades. Utilities in some Northern California communities have already imposed water-use cuts of 30 to 40 percent for commercial and residential consumers. Farmers are forced to choose which crops they wish to irrigate and which to allow to lie fallow. These hard choices aren’t unusual—especially in drought-prone California—but this extreme summer is making them especially difficult.

The heat wave and the drought, big enough problems in themselves, also add to the risk of massive wildfires. In an interview with The Dispatch, Jon Keeley, a research scientist with the U.S. Geological Survey who studies fire ecology, said that “fire season” is not a set of fixed dates, but that it “changes year to year … this year it started much, much, earlier because the rain stopped.”

What have communities done to prepare?

In California, the site of last year’s most destructive fires, Gov. Gavin Newsom has called for $2 billion for fire preparedness in this year’s budget. The proposal includes greater investment in building firebreaks, thinning overgrown forest land, and removing dead vegetation, as well as expanding the state’s fleet of firefighting planes and trucks. 

In Oregon, where fires last Labor Day forced 40,000 people to evacuate, the legislature has passed Senate Bill 762, which provided additional funding for firefighting, mandated that utilities create wildfire mitigation plans, and adopted wildfire-resistant land-use and building code regulations regarding buffer zones around homes in high-risk areas and fire-resistant construction materials. 

While much media coverage emphasizes the impact of climate change, it’s a welcome sign that policymakers are focusing on small-bore technical fixes for the many other causes of wildfires.

“People always aim at climate change right away…. [but] we were in trouble a long time ago,” said Craig Thomas, the founder of the Fire Restoration Group, which works with governments and communities to integrate fire ecology with fire management. Both he and Keely noted that while climate change certainly exacerbates the problems by increasing drought and heat waves, other issues, ranging from an overemphasis on fire exclusion to the expansion of human settlement into fire-prone areas and an increase in ignitions started by humans, are all also major contributors to the increased frequency of massive blazes.

Worth Your Time

• Writing for American Purpose, Suzanne Garment discusses how trust and faith in America’s core principles are key to preserving the nation as we face an uncertain future. “There isn’t a prognosticator in Washington who knows whether the country’s institutions will sustain our political continuity or collapse into something that’s still unrecognizable,” she writes. “We’ll have to rely on underlying convictions and our sense of how history will treat them. It will be a heavy lift, but not impossible.”

• In a lengthy piece for Reason magazine, Jacob Sullum looks back at how the Constitution survived the COVID-19 pandemic over the past year and a half. “COVID-19 did not kill the Constitution,” he concludes. “But the crisis made it vividly clear that we cannot count on politicians or bureaucrats to worry about limits on their authority, especially when they believe they are doing what is necessary to protect the public from a deadly danger. The task of enforcing those limits falls to judges who are willing to stick their necks out.”

Presented Without Comment

Also Presented Without Comment

Toeing the Company Line

• On Friday’s Dispatch Podcast, Anthony Gonzalez returns to chat with Sarah and Steve about his re-election campaign, the new January 6 select committee, Democrats’ narrow majorities in Congress, and why Republicans need to reject Trump’s election lies in 2022 and beyond.

• In Friday’s Uphill(🔒), Harvest and Ryan dive into the controversy surrounding Arizona Republican Rep. Paul Gosar’s decision to host a joint fundraiser with the alt-right provocateur and Holocaust denier Nick Fuentes, asking: Just who is welcome in today’s GOP? Plus, a look at the House’s new January 6 select committee.

• Jonah’s Friday G-File discusses Joe Biden’s love for ice cream—and how many media outlets treat certain things like news when they’re not exactly newsworthy. “Facts are no longer in the driver’s seat,” he warns. “Narratives are.”

• Just what is the true definition of patriotism for Christians who love their country? That’s the subject of David’s July Fourth French Press, where he discusses how many Christians have let their desire for power trump their pursuit of justice. “How does the Christian patriot love his or her nation well?” he asks. “Through a commitment to biblical justice that quite often means we empower others more than ourselves.”

Let Us Know

Over the weekend, a bunch of Dispatch folks put together a list of the best movies to watch on the Fourth of July, ranging from Independence Day to Casablanca to The Sandlot to National Treasure. Did we miss the one true, correct answer?

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Charlotte Lawson (@charlotteUVA), Ryan Brown (@RyanP_Brown), Harvest Prude (@HarvestPrude), Tripp Grebe (@tripper_grebe), Emma Rogers (@emw_96), Price St. Clair (@PriceStClair1), Jonathan Chew (@JonathanChew19), and Steve Hayes (@stephenfhayes).