The nation’s payrolls increased by 117,000 last month, with the private sector posting a stronger gain of 154,000, its best month since April. Job gains for May and June were revised up by a combined 56,000, and hourly wages got a decent bump, up 0.4% over the month.
The unemployment rate ticked down slightly, from 9.2% to 9.1% but that decline was due to fewer people looking for work, not more people finding jobs (note that the payroll data and the unemployment data come from different surveys). The share of the population working–a good proxy for employers demand for workers–also ticked down slightly, to 58.1%, the lowest rate since July 1983–28 years ago!
Still, the job and wage gains were better than expected and such expectations matter a lot right now. Fear feeds fear in this hyper-skittish market environment, and today’s jobs numbers should help calm some jittery nerves and dampen some destructive volatility.
Of course, gains of this magnitude along with what is really an unfavorable result on the unemployment rate—it doesn’t help if it falls because more people give up their job search—don’t change the overall story one bit. The economy is growing, but much too slowly to provide working families the jobs, hours or work, and paychecks they need to get ahead.
To see this more clearly, it’s useful to average over the past three months, in order to smooth out some of the statistical noise in these monthly data. If you do so, you get average monthly private sector gains of 111,000 over the past three months, compared to 240,000 over the prior three months, so no question that employment growth has sharply slowed.
One important negative trend continues unabated in today’s data: the loss of state and local jobs, as budget contraints, no longer offset by federal help, continue to force layoffs. States, cities, and towns laid off 39,000 workers in July (though this loss was largely due to the temporary gov’t shutdown in Minnesota last month) and 340,000 over the past year.
More details to follow and I’ll link to my CBPP colleague Chad Stone’s analysis in a few hours.