July #Jobs Report: U.S. Added 215,000 Jobs In July, #Unemployment Rate At 5.3%Comments Off


In line with economist expectations employers added 215,000 jobs in July, according to the latest release from the Bureau of Labor Statistic out Friday morning. For the second month in a row he unemployment rate came in at 5.3%, the lowest rate since April 2008.

“Todays numbers show that a boring jobs report can be a good jobs report,” says Andrew Chamberlin, chief economist at job site Glassdoor. Economists and investors agree that the report, while not exceptional, gives the Federal Reserve the option to raise rates at its next meeting in September if they want to, which they have implied they are. That’s assuming the August employment report is similarly solid and there are not major downward revisions to second quarter real gross domestic product.

The central bank has held the federal funds interest rate near zero since December 2008 to encourage economic growth. This report should give the Fed “all the assurance it needs to return to normal levels because we are indeed in normal times,” says Chamberlin. Joseph Lake, global economist for The Economist Intelligence Unit, wrote in a note on the report, “We expect that it will give the Fed sufficient confidence to lift the policy rate in September.”

Equity markets dropped following the release, after briefly flattening out all three major indices turned more sharply negative in the first 30 minutes of regular trading. The S&P 500 was down 0.3%, the Dow Jones Industrial average 0.3% and the Nasdaq Composite 0.5%.

Meanwhile the yield on the 10-year Treasury note dropped to 2.2% following the release. Kathy Jones, chief fixed income strategist at Charles Schwab, noted that if the Fed hikes rates while inflation remains low the yield on short term bonds will likely go up but longer term bonds won’t move much since they are more tied to inflation.

Beyond the headline numbers most of the report was subdued but positive –

The revisions to previous month’s reports were also positive. The payroll count for May was revised up to plus 260,000 from the latest reading of plus 254,000. June’s figure was revised up to plus 231,000 from plus 223,000 jobs. Net total employment gains in May and June were therefore 14,000 higher than BLS previously reported.

The sectors that added the most jobs were: retail trade (36,000), health care (28,000) and professional and technical services (27,000). Mining was the only major industry to lose jobs, cutting 5,000.

Currently 8.3 million Americans are unemployed, down 1.4 million year-over-year. In July there were 668,000 discouraged workers — i.e. people not currently looking for work because they don’t believe jobs are available for them and therefore are not considered unemployed.

The labor force participation rate was also steady at 62.6% in July, its lowest level in almost four decades. Previously the rate has been remained in a narrow 62.7% to 62.9% range. The U-6 rate, which measures under-employment, came in at 10.4% in July versus 10.5% in June and down from 12.2% a year earlier. The employment-population ratio was little changed at 59.3%.

One notable exception to the overall positivity was wage gains. In July average hourly earnings rose by 5 cents to $24.99. The 12-month wage growth rate is therefore 2.1%. Pre-recession normal year-over-year wage gains were between 3% and 4%. Jeremy Lawson, chief economist at Standard Life Investments, noted Fed policy makers who are less inclined to raise rates could use this as cover to stay low for longer. Although he sees it as more likely they will hike in September and use wages and inflation as a way to calibrate the path of rate hikes.

This article was written by Samantha Sharf from Forbes and was legally licensed through the NewsCred publisher network. Talent HQ is a premier information channel empowering professional development for recruiting and HR communities through regional events including Minnesota RecruitersWisconsin RecruitersFlorida Recruiters and California Recruiters.

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  • Posted on: Sunday, August 9th, 2015