The economy created almost a million jobs in July, according to the latest jobs report from the Burea of Labor Statics… (BLS)
- Total nonfarm payroll employment rose by 943,000 in July beating forecasts of 870k.
- The unemployment rate fell to 5.4% in July beating forecasts of a smaller decline to 5.7%.
Leisure and hospitality continue to lead all sectors with 380,000 jobs created in July. Two-thirds of that was in food services and drinking places (+253,000).
- Despite recent growth, employment in leisure and hospitality is down by 1.7 million, or 10.3 percent, from its level in February 2020.
- Other sectors that had a big month include local government education (+221,000), professional and business services (+60,000), and transportation & warehousing added (+50,000)
The good news didn’t stop with job gains. Wage growth also continued to show promise in the month of July…
- Average hourly earnings were up 4% year-over-year to $30.54 in July.
- Average weekly earnings were up 4.5% year-over-year to 1,062.79 in July.
The only downside continues to be labor participation. The rate has remained within a narrow range of 61.4% to 61.7% since June 2020. The current rate (61.7%) is 1.6 percentage points lower than in February 2020.
Overall, July’s report was well received. Neil Irwin said on Twitter “Great numbers. Healthy beat on payrolls. Employment to population ratio up 0.4%. America’s getting back to work.”
- Important to remeber that with economics there is always a balance. As Cullen Roche noted on Twitter, “Unemployment rate is the key for rate hikes. The faster we drop towards 4% the faster the Fed will start communicating policy changes.”
Despite the somewhat optimistic projections, there was a lot of uncertainty around the monthly report. Wednesday’s ADP Report was a complete flop and this had economists wondering if the BLS report would follow suit. CNBC reported that projections were anywhere from 350,000 to 1.2 million. This is undeniably a great report as we head into the weekend.