July’s Unemployment? It’s a Little Better – a “Rare Non-Disappointment”

Non-farm payrolls rose more than most economists expected in July, adding 163,000 new jobs with most industry sectors in plus territory, including a strong showing in manufacturers where some of the 25,000 increase was due to fewer layoffs in the auto industry.

The unemployment rate ticked up slightly to 8.3 percent.

This morning’s report from the U.S. Department of Labor surprised economists who were expecting a more modest increase in the range of 95,000 to 110.000. Nearly all the surveys also found economists expecting no change in the 8.2 percent unemployment rate.

The government also revised up its new job numbers for May from 77,000 to 87,000 and reduced June’s numbers by 16,000 to 64,000.

A “rare non-disappointment”

July’s surprise, which a Barron’s blogger called a “rare non-disappointment,” was more encouraging than it might seem. The fact that most sectors added jobs signals employers mirrored consumer confidence, as shown by The Conference Board’s Consumer Confidence Index. It was up three points in July to 65.9, the first rise in five months.

So far, the employment picture seems a replay of the last two years. Strong start to the year; slowdown in the spring and summer; then a pickup as fall approaches. Last year, after May through August saw fewer than 100,000 new jobs created each month, in September, the number jumped to 202,000. This year, July is an up month, but it’s anyone’s guess whether this is a blip or if it means the pickup may come sooner.

One sign suggesting a blip is that the Labor Department found no change in the average length of the work week or in factory overtime or other other hours. Increases here are typically an early signal of increased orders and business that may prompt additional hiring in the months to come.

“It’s certainly been consistent with past years, where we had a slowdown in the spring and summer, and in all three years, it’s been Europe,” Barclays economist Dean Maki told Forbes. “And then as we moved on, growth would pick-up in the summer, as would GDP growth.”

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Hospitality, leisure services see job gains

The U.S. Bureau of Labor Statistics, which compiles the data and analyzes the results, found the biggest gain came in typical summer time hospitality and leisure services, with restaurants and bars adding 29,400 workers during July. Amusement parks, museums, performing arts centers and other attractions, however, shed jobs.

Other sectors with big gains were health care and temporary workers. Doctor’s offices, outpatient facilities, and hospitals all added workers, creating 12,000 new jobs in the sector. Staffing services continued to grow, creating 14,100 new positions. Non-government education added 18,200.

The jump in manufacturing jobs was due, the BLS noted in its report, from “the motor vehicles and parts industry (which) had fewer seasonal layoffs than is typical for July, contributing to a seasonally adjusted employment increase of 13,000.”

The biggest cuts came from reductions by government, and in the utility sector, which was down 8,100 positions, largely due to a labor strike. State governments cut 6,000 jobs, while the Post Office lost 3,200. Minor increases in federal hiring left the sector with a net loss of 9,000 jobs.

Meanwhile, despite the increase in the unemployment rate, the numbers of people out of work or underemployed changed little in July. Between those out of work and those working part-time because they can’t find full-time jobs, they totaled 21 million. Another 2.5 million are out of work, but not officially counted among the unemployed, because they didn’t look for a job during the government’s survey period.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.


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