July 2016 Jobs Report

Unemployment Rate: 4.9 percent

Unemployed Americans: 7.8 million

Employment and Unemployment

1. The Department of Labor reported an unemployment rate of 4.9 percent for July, unchanged from last month.
2. The jobs report shows an increase of 255,000 nonfarm jobs in July, exceeding analysts’ prediction of job growth around 185,000. Employment for May was revised up from 11,000 to 24,000 jobs created; and June was revised up from 287,000 to 292,000. Revisions showed employers added 18,000 additional jobs in May and June than previously estimated.
3. In 2016, employment growth has have averaged 186,000 per month, down from 229,000 per month in 2015.
4. Unemployment in July among those ages 16-19 was 15.6 percent, down 0.4 percentage points from last month. For people of Hispanic or Latino ethnicity, the unemployment rate was 5.4 percent, down 0.4 percentage points from June. For African-Americans, the unemployment rate was 8.4 percent, down 0.2 percentage points from the prior month.
5. The number of long-term unemployed, those unemployed for 27 weeks or more, was 2.0 million, unchanged from last month. They account for 26.6 percent of the unemployed, up from 25.8 percent in the prior month.
6. The “real” unemployment or U-6 rate is 9.7 percent, up 0.1 percentage point from last month. This is the total percentage of unemployed and underemployed workers.
7. The “real” number of unemployed Americans is 15.7 million. These are people who are unemployed (7.8 million), want work but have stopped searching for a job (2.0 million), or are working part time because they cannot find full-time employment (5.9 million).  
8. In July, employment grew by 70,000 in professional and business services; 45,000 in leisure and hospitality; 43,000 in health care; 18,000 in financial activities; and 14,000 in construction. Employment in government grew by 38,000 jobs in July, with 30,000 at the local government level. Employment in mining fell by 6,000 last month. Since reaching a peak in September 2014, employment in mining has fallen by 220,000 or 26 percent.
9. While the Federal Reserve raised its main interest rate by 0.25 percent in December 2015, a weak employment report in May and global risks have caused the Fed to hold interest rates at this level. The Fed issued the following after its July 26-27 meeting, “Information received since the Federal Open Market Committee met in June indicates that the labor market strengthened and that economic activity has been expanding at a moderate rate…payrolls and other labor market indicators point to some increase in labor utilization in recent months. Household spending has been growing strongly but business fixed investment has been soft…In determining the timing and size of future adjustments to the target range for the federal funds rate, …the Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate.”
10. The next meeting of the Federal Reserve’s Federal Open Market Committee is September 20-21. 

Labor Force Participation

1. The labor force participation rate is 62.8 percent, up 0.1 from last month and remaining near the lowest level in 38 years. The persistently low labor force participation rate shows that millions of Americans are staying on the sidelines. Since October 2013, the participation rate has largely been stuck in a narrow range of 62.5 to 63.0 percent. Prior to the recession, the rate was 66 percent. 
2. If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 9.1 percent.
3. The share of American adults with jobs in July was 59.7 percent, up 0.1 percentage point from last month. This is nearly 4 percentage points below its pre-recession peak. 

Wages

1. In July, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents to $25.69. Over the year, average hourly earnings have risen by 2.6 percent.
2. July was the 84^th straight month that year-over-year hourly wage growth has been at or below 2.6 percent. Prior to the recession, wage growth routinely exceeded three percent.