July sees job growth, flat wages
Six-month 200,000+ hiring streak is longest since ’90s
WASHINGTON – The labor market extended its best streak since the late 1990s, posting solid job growth last month.
But the 209,000 net new nonfarm payroll jobs were sharply down from June’s 298,000.
In addition, there were signs in Friday’s Labor Department report that the job market still isn’t back to full health. Those markers included stagnant wages and an increase in the already high number of people out of work for more than six months.
Nonetheless, July was the sixth straight month that the economy added more than 200,000 net new jobs, which hadn’t happened since the early dot-com boom in 1997.
In a sign of the recovery’s progress, analysts said July’s job growth was a bit of a disappointment. A year ago such growth would have been a reason to celebrate. But economic conditions have improved since then.
With revisions that added a total of 15,000 more jobs to May’s and June’s numbers, the economy is averaging about 230,000 new jobs a month this year. That’s up from 194,000 last year.
The unemployment rate rose by a tenth of a percentage point, to 6.2 percent, in July. Still, that was down significantly from 7.3 percent a year earlier.
And the rise was for a good reason: The labor force grew by 329,000 last month as many people who had left the job market – and so weren’t being counted in the unemployment rate – returned. That caused the labor force participation rate to inch up for the first time in five months, to 62.9 percent, from its lowest since 1978.
Some key, good-paying industries accelerated their hiring pace last month.
Construction companies added 22,000 jobs, more than double the 10,000 added in June. Manufacturers increased their payrolls by 28,000, up from 23,000 in June.
Job growth declined in retail, to 26,700 in July from 41,200 the previous month. Professional and business services added 47,000 net new jobs, down from 73,000 in June. And job creation in the education and health services sector was 17,000 last month, well off June’s 45,000.
Overall, private employers added 198,000 net new jobs and government added 11,000.
The report also showed that the labor market still has some weaknesses. The labor force participation rate remained at a historically low level. Long-term unemployment increased by about 202,000 to 3.2 million. And wages are barely increasing.
Average hourly earnings rose just one cent, to $24.45, in July and increased only 2 percent from the previous year. That’s just a little more than inflation.
The economy grew at a 4 percent annual rate from April through June, the Commerce Department said this week. Much of that growth came from consumers and businesses catching up on activity lost during the first quarter, when severe winter battered much of the nation and the economy contracted at a 2.1 percent annual rate.
Consumer spending rose 0.4 percent in June, up from 0.3 percent the previous month, the Commerce Department said Friday. Personal income also increased 0.4 percent in June, the same pace as in May.