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July Brings More Ho-Hum U.S. Employment Numbers

Despite modestly encouraging upticks in several areas, jobs are not being added to the U.S. economy fast enough to really shake things up. Both the country as a whole, and IT workers in particular, continue to muddle through.

With a slight, but still pleasant surprise, the latest Employment Situation Summary from the U.S. Bureau of Labor Statistics beat economists’ forecasts by reporting 209,000 jobs added for July. The prior consensus had been that this number would fall between 180,000 and 185,000 jobs, so this turns out to be in the range of 9-to-14 percent better than anticipated.

 

Ed T 8 11 17 Figure 1

Source: NPR — U.S. Economy Adds 209,000 Jobs In July; Unemployment Dips To 4.3 Percent

 

To add to the good news, and boost the Dow to a new record high (however briefly that may persist), unemployment returned to its 16-year historic low of 4.3 percent for July as well. On a distinctly more positive note, wages rose by $0.09 per hour to average hourly earnings of $26.36. Thus, hourly wages are up by $0.65 or 2.5 percent since this same time last year.

 

This is not quite the 3 percent growth figure (or better) that President Trump and most labor economists would like to see realized, but it’s not terribly bad either. Given that the current U.S. inflation rate is a modest 1.6 percent, this also means that real wages are growing, albeit at a tortoise-like pace.

 

A closer look at the newest Employment Situation Summary provides some interesting additional details:

 

The labor force participation rate is still holding steady at about 62.9 percent, but the employment-to-population ratio of 60.2 percent is up by 0.4 percent for 2017. More people working out of the population is good (though the increase is slight); a noticeable uptick in the labor force participation rate would be even better.

 

Job gains for July occurred in the following employment sectors:

 

● Food services and drinking places added 53,000 jobs in July, and the sector is up by 313,000 jobs for 2017.
● Professional and business services added 49,000 jobs in July, more or less hitting the average jobs added in this sector over the past 12 months.
● Health care employment is up by 39,000 for July, with the biggest gains in ambulatory health care services (30,000) and hospitals (7,000). This sector has added 327,000 jobs over the past 12 months.
● Mining added 1,000 jobs for July, while remaining sectors — construction, manufacturing, whole trade, retail trade, transportation and warehousing, information, financial activities, and government — stayed mostly unchanged that month.