July Jobs Report: US Economy Created 943,000 Jobs Last Month

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June’s job gains were also revised upwards to 938,000 jobs added, showing the sustained pace of the recovery over the summer.

“I have not yet found a fault in this employment report”, wrote Harvard economist Jason Furman on Twitter (TWTR).

Since May 2020, America has created 16.7 million jobs. But it is still 5.7 million below its pre-pandemic level.

Still a long way to go

The hospitality and leisure industries – decimated by lockdowns last year – were once again the biggest contributors to job gains, accounting for more than a third of the total. Some 253,000 jobs were created in restaurants and bars just last month.

While the soaring growth is great news, the industry is still down by 1.7 million jobs since February of last year.

Hiring also picked up in education, according to seasonally adjusted data. But the labor office has warned that with education hires and layoffs so skewed by the pandemic, the adjusted data could overstate hirings in July.

Average hourly wages rose for the fourth consecutive month, adding 11 cents to $ 30.54 as strong demand for workers pressured companies to pay more to attract staff.

The unemployment rate has fallen to its lowest level since the start of the pandemic, falling across almost all demographic groups counted in the survey.

The unemployment rate for black teens jumped four percentage points to 13.3%.

The labor force participation rate climbed to 61.7%, while the employment-to-population ratio increased to 58.4%. Both measures are still below their February 2020 level.

“The stagnant participation rate confirms that there are millions of potential workers who are still outside the labor force, who are not currently looking for work and are therefore not counted among the unemployed,” said Cailin Birch, global economist at The Economist Intelligence Unit.

That said, nearly a million people found work in July, and that’s a good sign for both the job recovery and consumer spending, which the U.S. economy needs to grow. Birch said.

The pandemic recovery has been defined by a mismatch between companies’ demand for staff and the ability and willingness of workers to return there amid childcare issues, virus fears and generous benefits.

Fed involvement and Delta risk

For the Federal Reserve, which has touted the need to see more improvements in the job market before adjusting its policies, July’s employment figures are exactly what the doctor ordered.

Even if the central bank does not seem in a rush to end its easy money policies, the sustained growth in summer jobs is an important piece of the puzzle. In June, the Fed’s consensus projections showed an interest rate hike in 2023, when it is widely expected to start cutting back on monthly asset purchases before then.

As a result, the US stock market was mixed on Friday as investors digested the good economic news as well as the possible political implications.

On top of that, there’s a new hurdle on the way back to work: The Covid-19 Delta variant has brought down restrictions on public life in parts of the country, and the Centers for Disease Control and Prevention has put updated its guidelines on masks for those who have been vaccinated.

The increased spread of the virus from Delta has not weighed much on employment data so far, but that could change in future reports.



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