943,000 jobs  added in July: The unemployment rate fell to 5.4%

 

 

On Friday, the Labor Department reported that non-farm payrolls increased by 943,000 much above the Dow Jones estimate of 845,000 in July despite the spread of the delta variant and is the best since August 2020. The Bureau of Labor Statistics (BLS) also said that the unemployment rate slid to 5.4 percent while economists had predicted a rate of 5.7 percent.

There was more positive news as the average hourly income also rose more than expected; by 0.4 percent last month and is higher by 4 percent year on year. The labor participation rate saw another rise and reached 61.7 percent. This is the highest level since the pandemic hit the nation in March 2020. Another calculation that also included discouraged workers as well as workers with part-time jobs for economic reasons fell to 9.2 percent from 9.8 percent.

The BLS said that the data for recent months indicated that the rising demand for labor associated with a recovery from the pandemic might have put pressure to increase wages. It also cautioned that the COVID impact was still skewing data. It also mentioned that gains in wages were not the same across industries.

The number of jobs created in different industries are as follows:

  • Leisure and Hospitality — 380,000
  • Education — 261,000
  • Professional and Business Services — 60,000
  • Transportation and Warehousing — 50,000
  • Other services — 39,000
  • Health Care — 37,000
  • Manufacturing — 27,000

 

Total nonfarm payroll employment rose by 943,000 in July, and the unemployment rate

declined by 0.5 percentage point to 5.4 percent, the U.S. Bureau of Labor Statistics

reported today. Notable job gains occurred in leisure and hospitality, in local government

education, and in professional and business services.

 

This news release presents statistics from two monthly surveys. The household survey

measures labor force status, including unemployment, by demographic characteristics. The

establishment survey measures nonfarm employment, hours, and earnings by industry. For

more information about  the concepts and statistical methodology used in these two surveys.

In July, employment showed little change in construction and wholesale trade.

In July, average hourly earnings for all employees on private nonfarm payrolls increased

by 11 cents to $30.54, following increases in the prior 3 months.

 

Household Survey Data

 

The unemployment rate declined by 0.5 percentage point to 5.4 percent in July, and the

number of unemployed persons fell by 782,000 to 8.7 million. These measures are down

considerably from their highs at the end of the February-April 2020 recession. However,

they remain well above their levels prior to the coronavirus (COVID-19) pandemic (3.5

percent and 5.7 million, respectively, in February 2020). (See table A-1. See the box note

at the end of this news release for more information about how the household survey and its

measures were affected by the coronavirus pandemic.)

 

Among the major worker groups, the unemployment rates declined in July for adult men

(5.4 percent), adult women (5.0 percent), Whites (4.8 percent), Blacks (8.2 percent), and

Hispanics (6.6 percent). The jobless rates for teenagers (9.6 percent) and Asians (5.3

percent) showed little change over the month. (See tables A-1, A-2, and A-3.)

 

Among the unemployed, the number of persons on temporary layoff fell by 572,000 to 1.2

million in July. This measure is down considerably from the high of 18.0 million in April

2020 but is 489,000 above the February 2020 level. The number of permanent job losers

declined by 257,000 to 2.9 million in July but is 1.6 million higher than in February

  1. (See table A-11.)

 

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by

560,000 in July to 3.4 million but is 2.3 million higher than in February 2020. These

long-term unemployed accounted for 39.3 percent of the total unemployed in July. The

number of persons jobless less than 5 weeks increased by 276,000 to 2.3 million.

(See table A-12.)

 

The labor force participation rate was little changed at 61.7 percent in July and has

remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The

participation rate is 1.6 percentage points lower than in February 2020. The employment-

population ratio increased by 0.4 percentage point to 58.4 percent in July and is up by

1.0 percentage point since December 2020. However, this measure is 2.7 percentage points

below its February 2020 level. (See table A-1.)

 

In July, the number of persons employed part time for economic reasons, at 4.5 million,

was about unchanged. There were 4.4 million persons in this category in February 2020.

These individuals, who would have preferred full-time employment, were working part time

because their hours had been reduced or they were unable to find full-time jobs.

 

Transportation and warehousing added 50,000 jobs in July. Job growth occurred in transit

and ground passenger transportation (+19,000), warehousing and storage (+11,000), and

couriers and messengers (+8,000).In July, the number of persons not in the labor force who currently want a job was 6.5

million, about unchanged over the month but up by 1.5 million since February 2020. These

individuals were not counted as unemployed because they were not actively looking for work

during the last 4 weeks or were unavailable to take a job.

Health care added 37,000 jobs in July. Job gains in ambulatory health care services

(+32,000) and hospitals (+18,000).

Employment in manufacturing increased by 27,000 in July, largely in durable goods

manufacturing.

Employment in retail trade changed little in July (-6,000), following large increases in

the prior 2 months.


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