Total nonfarm payroll employment increased by 162,000 in July, the Bureau of Labor Statistics reported Friday, sending the unemployment rate down by two-tenths of a percentage point to 7.4 percent, although many of the gains were in low-wage jobs.
Employment rose in retail trade, food services and drinking places, financial activities, and wholesale trade.
Both the number of unemployed persons, at 11.5 million, and the unemployment rate, at 7.4 percent, edged down in July. Over the year, these measures were down by 1.2 million and 0.8 percentage point, respectively.
In July, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.2 million. These individuals accounted for 37.0 percent of the unemployed. The number of long-term unemployed has declined by 921,000 over the past year.
Employment in professional and business services, such as accounting and tax preparation, continued to trend up in July, adding 36,000 jobs. Within the industry, job growth continued in management of companies and enterprises (with a gain of 7,000 jobs) and in management and technical consulting services (also with a gain of 7,000). Employment in temporary help services changed little over the month.
Financial activities employment increased by 15,000 in July, with a gain of 6,000 in securities, commodity contracts, and investments. Over the year, financial activities has added 120,000 jobs.
Kathy Bostjancic, director of macroeconomic analysis at the Conference Board, a business membership and research association sees signs of a resilient job market in the latest jobs report. “With a gain of 162,000 jobs in July, the surprisingly resilient labor market sustained moderate job gains this spring and summer, even with the sequester (cut in federal government spending) and a weak global economy,” she said in a statement. “The self-sustaining trend in employment growth is likely strong enough to allow the Federal Reserve to begin tapering its quantitative easing by the end of the year. The strong recovery in housing helps to offset some of the fiscal headwinds. As a consequence, manufacturing added a little to its payroll this month. The service sector continued to greatly expand its workforce. This was especially true with respect to business services and the leisure and hospitality industries. Business needs the extra help given the expectation of improved final domestic demand through the second half of 2013. Gains, not just in jobs but in wages as well, can make that happen.”
The White House saw encouraging signs in the jobs report. “While more work remains to be done, today’s employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression,” said Alan Krueger, chairman of the White House Council of Economic Advisers, in a blog post on the White House Web site. “It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class, as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007.”
Rep. Dave Camp, R-Mich., chairman of the tax-writing House Ways and Means Committee, was more critical of the jobs report and commented on the need for further improvement in the economy through comprehensive tax reform.
"It is tough to find the bright spot in this report when the fact remains that the economy is still so weak that over half the kids coming out of college today are either unemployed or underemployed,” he said in a statement. “The American Dream used to mean working hard, getting a good education and moving into your own home to start a family. Now, for the current generation, the American reality appears to be moving back home with their parents and struggling to find a job. Meanwhile, Americans are paying more for gas and groceries, but they haven’t seen a pay raise in years. This simply isn’t acceptable and Washington needs to focus on real solutions to real problems. There has been a lot of good, bipartisan work done on fixing the tax code—which is too complex and is hurting our economy. In the coming months, we should build on that momentum and clean up the tax code for the first time since Ronald Reagan led the charge back in 1986.”
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