US Added 164K Jobs In July, Unemployment Rate Remains Steady

Marco Green
August 3, 2019

Analysts had expected about 165,000 jobs to be added in July and the unemployment rate to be 3.6%.

The July jobs report revealed yet another month of strong job growth. Job gains in the industry had averaged 22,000 per month in 2018. Including the revisions, job gains have averaged 140,000 a month for the past three months.

Unemployment rates were lower in June than a year earlier in 294 of the 389 metropolitan areas, higher in 67 areas, and unchanged in 28 areas, the Bureau of Labor Statistics said. In July, average hourly earnings of private-sector production and nonsupervisory employees rose by 4 cents to $23.46. The professional and business services sector saw the second largest job growth, an increase of 38,000 jobs.

Factories added 16,000 jobs in July. Since the President's election, the manufacturing industry has added 523,000 jobs and added 157,000 jobs in the past 12 months. The Institute for Supply Management's manufacturing index, which measures optimism among manufacturing companies, declined to a three-year low in July as uncertainty around trade policy continued to make future planning hard. Average hourly earnings increased 3.2 percent from a year ago, up from annual gains of 3 percent in June.

Despite the lowest jobless rate in almost 50 years, wage gains remain moderate, contributing to a tame inflation environment, which could be supportive of a rate cut at the Fed's September 17-18 policy meeting.

"The decline in hours worked suggests that employers may be pulling back more than headline hiring would suggest", said Andrew Schneider, a US economist at BNP Paribas in NY.

The unemployment rate dropped to 3.6 percent in April, hitting the lowest level since December 1969, and stood at 3.6 percent in May, before bouncing back at 3.7 percent in June.

The White House's "America First" policies are also restricting trade flows. The jobless rate remains at a almost 50-year low.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 363,000 in July to 4.0 million.

The labor force participation rate-which includes people who are working and those looking for work-edged up by 0.1 percentage point to 63.0 percent and is 0.3 percentage point above the rate when the President was elected in November 2016.

Even with the step-down in employment growth and moderate wage gains, the labor market is supporting the economy as the stimulus from last year's $1.5 trillion tax cut package fades.

"I do not think that anybody really anticipated that there were as many people on the sidelines willing to come into the labor force", said Marvin Loh, a global macro strategist at the financial services firm State Street.

Other reports by Click Lancashire

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