July BLS Report: Economy Charges Ahead Despite First Fed Rate Cut in a Decade
The latest jobs numbers are out from the Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor Senior Economist Daniel Zhao:
This morning’s jobs report signaled a healthy labor market for an economy in its longest period of economic expansion in U.S. history. Employers added 164,000 jobs to payrolls in July, largely in line with expectations and close to the average so far in 2019. While this rate of job growth is slower than 2018, in the wake of this week’s Fed interest rate cut, it still signals a healthy but slowing labor market.
Additionally, payroll gains in May were revised downward from 72,000 to 62,000 and in June from 224,000 to 193,000. That represents 31,000 fewer jobs added than previously reported and brings average monthly job gains to 165,000 in 2019 compared to 223,000 in 2018 — a clear sign that after ten years of an economic expansion, the nation’s pace of job gains is slowing.
The unemployment rate held steady at 3.7 percent, slightly above expectations but only 0.1 points above its 50-year low. The labor force participation rate and employment-population ratio both gained 0.1 points, ending at 63.0 percent and 60.7 percent respectively. As the labor market continues to tighten, an uptick in these numbers signals there are still more workers on the sidelines ready to rejoin for higher pay and jobs.
The highlight of today’s jobs report was wage growth. Year over year growth in average hourly earnings perked up to 3.2 percent in July. Pay growth is still below its February 2019 peak of 3.4 percent, a serious concern for the health of the recovery. However, today’s report helps assuage concerns about possible slowing pay growth, although it remains to be seen whether pay will continue to accelerate in coming months with unemployment near historic lows.
Which Industries Are on the Rise?
Among industries, job gains in July were led by the nation’s booming health care industry, which added a robust 50,400 jobs last month. On Glassdoor, our July Job Market Report shows there are more than 850,000 open jobs in health care as of July. Other industries strongly adding jobs in July include professional and business services (which includes many tech jobs) (+38,000 jobs), and finance (+18,000 jobs). After two months of weak job gains, the manufacturing sector rebounded slightly in July, adding 16,000 jobs despite an ongoing trade war with China.
Sectors that lost jobs in July include information (which includes most traditional media and publishing) (-10,000 jobs), mining and logging (-5,000 jobs), the beleaguered retail trade sector (-3,600 jobs), and utilities (-400 jobs).
Overall, today’s jobs report provides reassurance to Fed policymakers that despite a weakening global economic picture and an ongoing trade war with China, the U.S. labor market remains strong.
To speak with Daniel Zhao about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.