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BLS issues another ‘banner jobs report’
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The unemployment rate dipped down to 4.3 percent in July, approaching full employment and matching the 16-year low also seen in May, according to the Bureau of Labor Statistics (BLS). U.S. employers added 209,000 jobs, beating expectations from economists, and the 222,000 jobs added in June were revised up to 231,000.
"This was a banner jobs report," said Jed Kolko, chief economist for job search engine Indeed, based in Austin, Texas. "Job growth in the past three months is ahead of the 2016 pace and way ahead of what's needed to keep up with population growth. Working-age adults are now more likely to be employed than at any time since the recession."
The unemployment rate has been steadily falling since a peak of 10 percent in 2009, at the height of the Great Recession. In July, the unemployment rates for adult men (4.0 percent), adult women (4.0 percent), teenagers (13.2 percent), Asians (3.8 percent), blacks (7.4 percent), and whites (3.8 percent) showed little or no change. The jobless rate for Hispanics (5.1 percent) ticked up from 4.8 percent.
The number of long-term unemployed—jobless for 27 weeks or more—rose slightly to 1.8 million and accounts for 25.9 percent of the unemployed.
The number of individuals categorized as involuntary part-time workers—seeking full-time employment but working part time—held at 5.3 million in July.
Additionally, 1.6 million people were considered marginally attached to the labor force; they are unemployed but want and are available to work, and had looked for a job sometime in the previous 12 months. Among this group, 536,000 individuals were considered discouraged—not currently looking for work because they believe no jobs are available for them.
The remaining 1.1 million people marginally attached to the labor force in July had not searched for work in the past month for reasons such as school attendance or family responsibilities, according to the BLS.
"Today's low unemployment rate masks some reasons for concern," Kolko said. "Today's unemployed are more than twice as likely to be out of work for more than six months than the unemployed in April 2001 [when the unemployment rate was in a similar place]. "They're also more likely to be underemployed, as measured by the broader U-6 unemployment rate. Finally, a larger share of prime-working-age adults are not employed today versus April 2001 because they're out of the labor force."
Cathy Barrera, the chief economic adviser for the online jobs platform ZipRecruiter based in Santa Monica, Calif., has been concerned about younger workers lagging behind since the recovery from the recession. "However, we're starting to see a trend for that particular group with modest rises in labor force participation and downward ticks in unemployment," she said. "We're seeing more jobs that don't require a college degree get posted. As more jobs become available for them, we could see their labor force participation return to prerecession levels."
Services Lead Job Gains, Manufacturing Still Down
Significant job gains in July occurred in food services (53,000 jobs), professional and business services (49,000 jobs), and health care (39,000 jobs).
Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.
"The fastest job growth in July was in lower-wage industries," Kolko pointed out. "That's helping the least-educated Americans get back to work. The recovery is now strong and long enough to lift many of the people hurt most by the recession—except in manufacturing, which continues to lag overall jobs growth."
Another continual worry spot is wage growth, which remains sluggish.
Average hourly earnings for all private-sector workers rose by 9 cents in July to $26.36. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent.
"While we're still mystified by the muted wage growth, wages among the lower 25th percentile is growing a lot faster than those who are at the top 75th percentile," Barrera said. "This is one indication that the job market for younger workers and/or workers without college degrees may be heating up, which is great news because this is the group that has not seen as full a recovery as everyone else."
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