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Fri Aug 3, 2018, 08:30 AM

Payroll employment increases by 157,000 in July; unemployment rate edges down to 3.9% [View all]

Source: U.S. Bureau of Labor Statistics

Economic News Release USDL-18-1240

Employment Situation Summary
Transmission of material in this news release is embargoed until 8:30 a.m. (EDT) Friday, August 3, 2018

Technical information:
Household data: (202) 691-6378 * cpsinfo@bls.gov * www.bls.gov/cps
Establishment data: (202) 691-6555 * cesinfo@bls.gov * www.bls.gov/ces

Media contact: (202) 691-5902 * PressOffice@bls.gov


Total nonfarm payroll employment rose by 157,000 in July, and the unemployment rate edged down to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, in manufacturing, and in health care and social assistance.

Household Survey Data

In July, the unemployment rate edged down by 0.1 percentage point to 3.9 percent, following an increase in June. The number of unemployed persons declined by 284,000 to 6.3 million in July. Both measures were down over the year, by 0.4 percentage point and 676,000, respectively. (See table A-1.)

The labor force participation rate, at 62.9 percent in July, was unchanged over the month and over the year. The employment-population ratio, at 60.5 percent, was little changed in July but has increased by 0.3 percentage point over the year. (See table A-1.)

Establishment Survey Data

Total nonfarm payroll employment increased by 157,000 in July, compared with an average monthly gain of 203,000 over the prior 12 months. In July, job gains occurred in professional and business services, in manufacturing, and in health care and social assistance. (See table B-1.)

Employment in professional and business services increased by 51,000 in July and has risen by 518,000 over the year. Over the month, employment edged up in temporary help services (+28,000) and in computer systems design and related services (+8,000).

Manufacturing added 37,000 jobs in July, with most of the gain in the durable goods component. Employment rose in transportation equipment (+13,000), machinery (+6,000), and electronic instruments (+2,000). Over the past 12 months, manufacturing has added 327,000 jobs.

In July, employment in health care and social assistance rose by 34,000. Health care employment continued to trend up over the month (+17,000) and has increased by 286,000 over the year. Hospitals added 7,000 jobs over the month. Within social assistance, individual and family services added 16,000 jobs in July and 77,000 jobs over the year.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $27.05. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.65 in July. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for May was revised up from +244,000 to+268,000, and the change for June was revised up from +213,000 to +248,000. With these revisions, employment gains in May and June combined were 59,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) After revisions, job gains have averaged 224,000 per month over the last 3 months.

The Employment Situation for August is scheduled to be released on Friday, September 7, 2018, at 8:30 a.m. (EDT).

Read more: https://www.bls.gov/news.release/empsit.nr0.htm

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This is much lower than expected. I heard on the radio this morning estimates in the range of 190,000 to 200,000. May and June numbers were both revised up.

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U.S. Expected to Add 190,000 Jobs in July


Last Updated Aug 3, 2018 at 7:57 am ET

The U.S. is expected to add 190,000 jobs in July, a modest slowdown from June's rate of hiring. The unemployment rate is expected to edge down to 3.9% from 4%. Follow along as we dig into the numbers.

From the running comments:

Is it the 1960s All Over Again in the Economy?
The U.S. unemployment rate has fallen to multi-decade lows and there's little slack in the labor market, yet wage growth has barely begun to pick up pace and inflation has remained subdued. It's starting to look a little like the 1960s.

What to Watch #5: No Degree, No Problem
Unemployment rates have been trending downward for workers of all education levels, but the jobless rate for workers 25 years and older with less than a high-school degree has fallen especially sharply over the past couple of years. In June, this rate ticked up to 5.5%, but was still down from a recent peak of 8.5% in September 2016. Will the unemployment rate for those without a high-school degree continue its sharp descent?
-- Sarah Chaney, Eric Morath

What to Watch #4: Where Will Wages Rise?
Hourly wages were up 2.7% in June from a year earlier, in line with growth rates posted in recent months. Modest gains in pay have posed a puzzle to many economists, who expect a low unemployment rate to translate into faster pay growth. It's worth watching the breakdown of wages according to industry. In June, some industries with reported labor shortages, such as construction and leisure and hospitality, saw stronger wage growth, while others, like the transportation industry, experienced muted growth.
-- Sarah Chaney, Eric Morath

What to Watch #3: Parsing the Participation Rate
The share of American adults ages 16 and over working or seeking work, known as the labor-force participation rate, ticked up by 0.2 percentage point to 62.9% in June. This rise in participation runs counter to the longer-running trend of an aging population that is less likely to work. Rising participation among underrepresented groups, such as African-Americans, suggest the economic expansion is spreading to pull more workers in from the sidelines. Watch in July's report for another rise in participation and what demographic groups are helping drive these gains.
-- Sarah Chaney, Eric Morath

What to Watch #2: Hiring Hits a Sweet Spot
Through the first half of the year, employers added an average of 215,000 a jobs a month, an unexpected acceleration from last year's first-half average of 184,000 a month. Economists generally expect hiring to ease as it enters the later stages of an expansion when workers are in short supply, which a 4.0% unemployment rate would suggest. What might be even more unexpected is the industries that are leading the charge. According to an Indeed.com analysis, manufacturers are adding jobs at double last year's pace. And retailers are hiring an average of 12,000 workers a month this year, rather than cutting 7,000 jobs.
-- Sarah Chaney, Eric Morath

What to Watch #1: Lower Jobless Rate
Watch for the unemployment rate to tick down after a jump to 4.0% in June. Jobless claims, a proxy for layoffs, have remained at historically low levels, supportive of strong labor market conditions. Further, concerns that tariffs willcause companies to hold back hiringhave yet to materialize in a widespread way. The question is, how low can unemployment fall without sparking overheating?
-- Sarah Chaney, Eric Morath

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