The government reported Friday that the U.S. economy created 164,000 seasonally adjusted new jobs in July, a significant retreat from June’s figures, but nowhere near the plunge of May, which now can be considered an outlier. As it does every month, the Bureau of Labor Statistics revised its job tally for the previous two months, changing the count for June from 224,000 to 193,000, and the count for May from 72,000 to 62,000, a combined reduction of 41,000.
The headline rate of unemployment—which the bureau calls U3—remained unchanged at 3.7% in July. That’s the best it’s been since October 1969. Another measure that takes into account underemployment as well as unemployment, and labeled U6, fell 0.2 to 7.0%. After 10 years of economic growth, that number is still higher than it has been historically.
The BLS depends on the Current Employment Survey of 142,000 business establishments at 689,000 individual worksites to estimate the number of jobs gained in a particular month and derives the unemployment rate from another study, the Current Population Survey of 60,000 households. The final day of the surveys falls around the 12th of each month, which means this month’s jobs data actually measure jobs gained in the first part of July and the last part of June.
July marked the 106th consecutive month of job expansion, the longest such stretch since solid job statistics started being collected 80 years ago.
Average wages rose again in July. On a year-over-year basis, they have risen 3.2% against a current inflation rate of 1.6%. You can see how much that amounts to on an hourly basis for various job categories here. For instance, while the average hourly rate for all nonfarm workers in July was $27.98, for new workers in the “leisure and hospitality” category, the average hourly rate was $16.59.
Reporters at The Wall Street Journal wrote Thursday:
The American middle class is falling deeper into debt to maintain a middle-class lifestyle.
Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy.
Consumer debt, not counting mortgages, has climbed to $4 trillion—higher than it has ever been even after adjusting for inflation. Mortgage debt slid after the financial crisis a decade ago but is rebounding.
That debt has grown in part because Americans overall are feeling more confident about the economy. Indeed, two measures put consumer confidence at the highest level it’s been since the turn of the century nearly two decades ago. But when the hard times come, as they inevitably do, lower levels of employment can mean a big pile of debt will force people to empty their savings, miss payments, face foreclosures or rental evictions, and be hit with other financial squeezing.
While job growth has slowed over the past three months, it’s still been strong enough on the surface for Donald Trump to crow about it. However, as Patricia Cohen at The New York Times reports:
Julián Castro, the housing secretary in the Obama administration, declared that “the idea that America is doing just fine is wrong.”
“There are a lot of Americans right now that are hurting,” he said. “Just go and ask the folks that just received notice that they’re getting laid off by General Motors.”
And last month, Senator Elizabeth Warren of Massachusetts posted an essay on Medium warning of “the coming economic crash” and the “economy’s shaky foundation.”
Other statistics from the July report:
The civilian workforce rose by 370,000 in July, after rising 335,000 in June and 176,000 in May.
The labor force participation rate rose to 63% in July. The employment-population ratio rose to 60.7%.
Unemployment rates differ by race and sex. (July percentages in bold; June percentages in [brackets and italics].) Adult men: 3.4% [3.3%]; Adult women: 3.4% [3.3%]; Whites: 3.3% [3.3%] ; Blacks: 6.0% [6.0%]; Asians: 2.8% [2.1%]; Hispanics: 4.5% [4.3%]; American Indians: Not counted monthly.
• Average hourly earnings of private-sector production and nonsupervisory employees rose in July by 4 cents an hour to $23.46.
• Average hourly earnings for all employees on private nonfarm payrolls in July rose 8 cents an hour to $27.98.
• Average work week for all employees on nonfarm payroll declined 0.1 hour to 34.3 hours in July.
• The manufacturing work week in July fell by 0.3 hours to 40.4 hours.
July Job Gains and Losses for selected categories:
- Temporary help services: 2,200
- Transportation & warehousing: 300
- Financial activities: 18,000
- Leisure & hospitality: 10,000
- Information: -10,000
- Professional and business services: 38,000
- Education and health services: 66,000
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- Health care & social assistance: 50,400
- Retail trade: -3,600 [after shedding 37,100 in March-June]
- Construction: 4,000
- Manufacturing: 16,000
- Mining and Logging: -5,000
Here's what the seasonally adjusted job growth numbers have looked like in the previous decade compared with this July’s gain of 164,000 jobs:
July 2009: -341,000
July 2010: -88,000
July 2011: 61,000
July 2012: 153,000
July 2013: 105,000
July 2014: 227,000
July 2015: 293,000
July 2016: 336,000
July 2017: 204,000
July 2018: 178,000