For the second month in a row the U.S. outperformed the consensus from economists for job growth by creating 209,000 net new jobs in July 2017 versus an expectation of 180,000. In addition, job gains for May 2017 were revised downwards from 152,000 to 145,000, but June was increased from a preliminary gain of 222,000 to 231,000.
The unemployment rate fell slightly to 4.3 percent from 4.4 percent in June, remaining well below the Federal Reserve’s 5.0 percent definition of full employment. The 4.3 percent unemployment rate ties the lowest level seen in the past 16 years.
The net job gain in the prior 12 months totaled 2.158 million. Total net job gains in the prior 12-months still significantly trails the 3.129 million level seen in February 2015, as shown in the graph.
The U.S. continues the trend of having more jobs than any time in history, as shown in the following graph. From the pre-recession peak in January 2008, total job loss was 8.697 million to the February 2010 trough. Since then, the U.S. has created 16.882 million net new jobs.
Employment in the Leisure and Hospitality sector is a good proxy of the overall health index of the U.S. economy. People do not spend money on vacations, cruises, entertainment spas or dinners out unless they feel good about the future economy. My premise is that the U.S. economic outlook is healthy as long as the employment growth rate in Leisure and Hospitality exceeds that of the country overall. Current Leisure and Hospitality job growth in the prior 12 months was 2.21 percent versus 1.50 percent for the total economy. I see no recession on the horizon at this time foregoing unanticipated economic shocks. In the 12-months ending June 2017, Leisure and Hospitality job growth was 2.09 percent – hence a strengthening in the past month.
Average hourly earnings were up 9 cents in July versus June to $26.36. Hourly pay has risen 65 cents in the past 12-months, a gain of 2.5 percent. Hourly earnings monthly since 2012 are shown in the following graph.
Other items in the July 2017 jobs report:
- The Number of Persons Unemployed for Less Than 5 Weeks declined by 172,000 from June to 2.133 million
- Long-Term Unemployed (jobless for 27 or more weeks), now at 1.785 million, was down 121,000 from June 2017 and down 232,000 from a year ago
- Civilian Labor Force Participation Rateis now 62.9 percent, ever-so-slightly changed from a year ago (62.8 percent)
- Unemployment Rates varied significantly with educational attainment:
- Employment-Population Ratiois now 60.2 percent versus 59.8 percent a year ago – the bigger the better
- Number of Persons Employed Part Time for Economic Reasons(also known as involuntary part-time workers) are individuals desiring full-time employment but either had their hours cut back or cannot find a full-time job), declined by 44,000 from June and is down 654,000 from a year ago to 5.282 million
- Marginally Attached to the Labor Force(not currently counted in the labor force, want and are available for work and had looked for a job in the prior 12 months) dropped by 321,000 in the past year to 1.629 million. Within that group, 536,000 were classified as Discouraged Workers – persons not currently looking for work because they believe there are no jobs available for them. Discouraged Workers dipped by 55,000 in the past 12 months
- Health Care gained 39,000 jobs in July and has added 325,000 net new jobs in the prior 12-monthl
- Food Services and Drinking Places added 53,000 jobs in July and 313,000 in the past year
- Mining(includes oil and gas exploration and production) added just 1,000 jobs in the month
- Leisure and Hospitality jobs increased by 62,000 jobs in July and are up by 346,000 in the past 12-months
To read the entire release from the Bureau of Labor Statistics click https://www.bls.gov/news.release/pdf/empsit.pdf