Unemployment Edges Up to 4.3%
Jobs Growth
The rate of new jobs creation slowed in July, delivering 114,000 new jobs over the month, below the average monthly gain of 215,000 over the past 12 months.
Top Industries
Hiring activity was most robust in the healthcare, construction and transportation and warehousing sectors. Jobs were lost in the information sector.
Unemployment
The unemployment rate hit a new record in July, reaching its highest level in nearly three years at 4.3%.
Wages
In July, average hourly earnings increased 0.2%, shifting the gain over the past 12-month period to 3.6%.
Work Week
The average work week tightened by 0.1 hour to 34.2 hours for July.
Temporary Job Trends
The temporary jobs sectors experienced a loss of 8,700 jobs in July.
What Does It All Mean?
With fewer jobs created in July than many economists expected, there is speculation about whether this signals the inevitable post-pandemic calming of the labor market or an actual downturn for the economy. Labor market activity has definitely slowed down over the past few months, but whether that reflects more than a temporary change in the pace of growth is yet to be seen.
There are a number of conflicting indicators that confound anyone’s ability to make solid predictions. For example, in addition to sluggish jobs growth, the rate of job openings is approaching its lowest level in more than three years, and applications for unemployment benefits recently reached the highest point in the past 12 months. Conversely, layoffs and voluntary quits have changed little in the past month. Overall, the economy remains fairly strong, with continuing gains in both consumer spending and productivity. Despite some obvious contradictions in national trends, all of this points to greater confidence in the probability that the Federal Reserve will lower interest rates in September.
Improving the financial outlook for business investment often leads directly to the need for workforce expansion, spurring intensifying competition for talent for every employer. That is why continuously scanning the talent landscape for the right mix of skills, experience and potential is always a smart strategy for any employer.
Sources: U.S. Bureau of Labor Statistics, Staffing Industry Analysts, NBC, CNN, CNBC, Fox Business, USA Today, The New York Times, The Wall Street Journal.
