Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
US jobs improve in July as unemployment rate dips to 5.4% from 5.9% as a result of job increases. Average earnings per hour also rise.
The US reported that jobs rose by 943,000 for the month of July, surpassing the 845,000 estimates set by Dow Jones. This recent nonfarm payroll increase represents a slide in the unemployment rate from 5.9% to 5.4% which is a post-pandemic low. According to the US Labor Department’s Bureau of Statistics, the recent figures reported are the best since August 2020.
The industry with the most job gains was leisure and hospitality, a complete turnaround from a year ago during the COVID-19 pandemic. Many facilities under this sector were forced to close down during that period as patronage dried up. However, as the economy continues to recover, the industry is making a big comeback.
Currently, this industry leads in job creation and shows no signs of slowing down. This month, leisure and hospitality contributed 380,000 new jobs and 253,000 were in bars and restaurants.
The education industry experienced the second-highest job growth, recording 261,000 new hires. The Bureau of Labor Statistics however pointed out that this figure could be distorted. The government agency argues that the pandemic probably elevated the numbers reported for the month.
Professional and business services added 60,000 new jobs in July, while 50,000 more came from transportation and housing for the same period. Notably, retail posted a 6,000 loss, with construction and wholesale trade recording no increases. Other sectors that recorded significant increases were:
- Other services – 39,000
- Health care – 37,000
- Manufacturing – 27,000
- Information – 24,000
- Financial activities – 22,000
- Mining – 7,000
The bureau also noted that wages also increased. The US average hourly earnings beat expectations, climbing 4% from the same period last year, and 0.4% for the month. According to the bureau, “the data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages”.
Factors That Threatened Growth in US Jobs for July
Widespread fears over Covid-19’s delta variant did little to slow down hirings in July, which rose at its fastest pace in a year. Breakouts from these variants occur in areas with larger populations of unvaccinated people, and there is widespread fear that such could stifle economic activity.
The Labor Department also reported that job growth still occurred in the face of several companies struggling with tight labor supply. In addition to this, the average hourly earnings saw a 0.4% increment and represent a total 4% rise YoY. Also, the fact that the recent figures surpassed expectations may have contributed to the jump in stock market futures for Friday’s trading session.
The labor force participation rate rose to 61.7%, the highest it has been since March 2020, and further underscored the drop in the unemployment rate. Furthermore, a metric for measuring the number of disgruntled workers fell from 9.8% to 9.2%. This same metric also includes workers holding part-time jobs due to the prevailing circumstances of the economy.
Overall, the unemployment rate has fallen from a pandemic high of 14.8%. However, it is still a long way from the pre-pandemic level of 3.5%.