August 7, 2015

July 2015 Jobs Report

Unemployment Rate: 5.3 percent

Unemployed Americans: 8.3 million

Employment and Unemployment

  1. The Department of Labor reported an unemployment rate of 5.3 percent for July, unchanged from last month. It reported an increase of 215,000 nonfarm jobs in July. Employment for May was revised up from 254,000 to 260,000 jobs created; and June was revised up from 223,000 to 231,000.
  2. Unemployment in July among those ages 16-19 was 16.2 percent, down 1.9 percentage points from last month. Among those 20-24, the unemployment rate was 10.1 percent, up 0.2 percentage point from June. For African Americans, the unemployment rate was 9.1 percent, down from 9.5 percent.

  3. The number of long-term unemployed, those unemployed for 27 weeks or more, was 2.2 million, accounting for 26.9 percent of the unemployed. 

  4. The “real” unemployment or U-6 rate is 10.4 percent, down 0.1 percentage point from June. This is the total percentage of unemployed and underemployed workers. 

  5. The “real” number of unemployed Americans is 16.5 million. These are people who are unemployed (8.3 million), want work but have stopped searching for a job (1.9 million), or are working part time because they cannot find full time employment (6.3 million). 

  6. In July, employment grew by 36,000 in retail trade; 28,000 in health care; 27,000 in professional and technical services; and 17,000 in financial activities. There was little to no change in employment in construction, wholesale trade, information, and government. Employment in mining fell for the seventh month in a row, with a decline of 5,000. The mining sector includes oil and gas. Since December 2014, employment in the mining industry has fallen by 78,000. 

Labor Force Participation

  1. The labor force participation rate is 62.6 percent, unchanged from last month and the lowest level in nearly 38 years. The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since April 2014, the participation rate had been stuck in a narrow range of 62.6 and 62.9 percent. Prior to the recession, the rate stood at 66 percent.  

  2. If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.7 percent.

  3. The share of American adults with jobs in July was 59.3 percent, unchanged from June. This is about four percentage points below its pre-recession peak.  

  4. The Federal Reserve has been weighing whether to raise its short-term interest rate for the first time in almost a decade. The rate has remained near zero since 2008 in an effort to boost the economy. As noted in Market Watch, a few weeks ago, the Fed it wanted to see “some further improvement” in the labor market before it went ahead. The Fed will meet September 16-17.

Wages

  1. While the economy has added an average of 243,000 jobs a month over the last 12 months, hiring has failed to translate into wage growth. Average hourly earnings for all employees on private nonfarm payrolls rose by five cents to $24.99. Over the year, average hourly earnings have risen by only 2.1 percent. 

  2. July was the 72nd straight month that year-over-year hourly wage growth has been below 2.5 percent. Prior to the recession, wage growth routinely exceeded three percent. 

Issue Tag: Economy