Economy Added 209k Jobs in July; Unemployment Rate Ticks Back Down to 4.3%; Earnings Rise

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Unemployment rate FELL in July to 4.3 percent, matching May for the lowest unemployment rate since May 2001;
  • Number of jobs rose 209,000 in July;
  • About 30.1 percent of new jobs were in two lowest salaried occupation categries: retail and leisure and hospitality (including 53,000 new restaurant hires)
  • Prior month job totals had offsetting revisions: May from 152k new jobs to 145k, June from 222k new jobs to 231k;
  • Private sector payrolls ROSE 205,000 in July; Government payrolls GREW 4,000;
  • Unemployment in July was virtually flat to June, up 4,000 to 6,981,000;
  • Average weekly hours in July REMAINED at 34.5;
  • Average weekly earnings ROSE $3.10 from June, a year-year pace of 2.8 percent;
  • Average hourly earnings ROSE 9¢ in July, a 2.5 percent year-year gain;
  • The number of persons working full-time workers DECLINED 54,000 in July; the number of part-time workers INCREASED 393,000;
  • Number of multiple jobholders increased 50,000 in July and is up 228,000 in the last year, about 10.6 percent of new jobs in the last year;
  • Labor force participation rate IMPROVED 0.1 percentage point in July to 62.9 percent, second straight month-month increase;
  • Employment-Population (E-POP) ratio ROSE to 0.1 percentage point in July to 60.2 percent; when the E-POP was 62.9 percent when the recession began in December 2007

Image result for employment report

For the fourth time since Donald Trump assumed the presidency, monthly payrolls expanded by more than 200,000 in July with 209,000 new jobs, the Bureau of Labor Statistics reported Friday. The President lost no time hailing the results, patting himself on the back in a tweet just moments after the BLS report was released. (In doing so, the President violated a protocol under which the Executive Branch had agreed not to comment on government statistical releases for 60 minutes after release.)

In the first six months of the Trump Administration, the nation’s economy added 1.074 million jobs compared with a loss of 2.659 million jobs in the same period of the Obama Administration as the country was still in the throes of a recession. (The country did not begin to add jobs until the Obama Administration was 14 months old and ended up adding 12.2 million jobs through Obama’s terms in office.)

The July jobs report was notable in that unemployment, as defined by BLS, barely grew: up just 4,000 while employment spurted up by 345,000.

There was also a positive sign in average weekly earnings which grew $3.10 and is now up 2.8 percent year-year for the second straight month, the strongest was growth since March 201 to February 2011 when weekly wages grew 2.9 percent.

Holding back wage growth was the distribution of the new July jobs: 62,900, about 30 percent of the total in the low-paying retail and leisure hospitality industry categories (or super-sectors in BLS-speak). That’s the largest share since May 2016 when the two super-sectors combined for 41.4 percent of that month’s new jobs.

Average weekly earnings in the retail sector are $463.27 and in the leisure-and-hospitality sector (which includes restaurant workers) $331.08. The average weekly earnings for all private sector workers, according to the BLS report is $744.77.

The leading job producer in July was the professional and business services sector which added 49,000 jobs followed closely by the health care sector which added 45,000 jobs. Included in the professional and business jobs were 14,700 temp jobs. Combined with the growth of 393,000 part time jobs, the report continues to show businesses reluctant to make permanent staffing additions.

In another sign of continuing labor market stress, the number of voluntary jobs leavers or “quits” was down 40,000 in July. “Quits” are usually interpreted as a sign of confidence in the labor market, confidence in the ability to leave one job and find another. But, as the growth in weekly reports on “continued claims” for unemployment insurance suggests, getting that “next” is proving elusive.

Overall, the labor force (the sum of employed and unemployed” grew 349,000 in July and the number of persons not in the labor force dropped 156,000, the second straight month-month decline. Nonetheless, the labor force participation rate rose to 62,9 percent, back to where it was in April.

The unemployment rate for individuals without a high school diploma rose 0.5 percentage points to 6.9 percent while the unemployment rate for high school graduates dipped to 4.5 percent from 4.6 percent in June. The unemployment rate for college graduates was unchanged in July at 2.4 percent.

With an uptick in houses under contract, the number of construction sector jobs increased 6,000 including 7,300 new residential construction jobs. The number of manufacturing jobs increased 13,000 in July including 1,600 auto manufacturing jobs. There was also an increase of 3,800 jobs at auto dealerships.

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124.

You can follow Mark Lieberman on Twitter at @foxeconomics.

 

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