July Brings More Ho-Hum U.S. Employment Numbers
With a slight, but still pleasant surprise, the latest Employment Situation Summary from the U.S. Bureau of Labor Statistics beat economists' forecasts by reporting 209,000 jobs added for July. The prior consensus had been that this number would fall between 180,000 and 185,000 jobs, so this turns out to be in the range of 9-to-14 percent better than anticipated.
Source: NPR — U.S. Economy Adds 209,000 Jobs In July; Unemployment Dips To 4.3 Percent
To add to the good news, and boost the Dow to a new record high (however briefly that may persist), unemployment returned to its 16-year historic low of 4.3 percent for July as well. On a distinctly more positive note, wages rose by $0.09 per hour to average hourly earnings of $26.36. Thus, hourly wages are up by $0.65 or 2.5 percent since this same time last year.
This is not quite the 3 percent growth figure (or better) that President Trump and most labor economists would like to see realized, but it's not terribly bad either. Given that the current U.S. inflation rate is a modest 1.6 percent, this also means that real wages are growing, albeit at a tortoise-like pace.
A closer look at the newest Employment Situation Summary provides some interesting additional details:
The labor force participation rate is still holding steady at about 62.9 percent, but the employment-to-population ratio of 60.2 percent is up by 0.4 percent for 2017. More people working out of the population is good (though the increase is slight); a noticeable uptick in the labor force participation rate would be even better.
Job gains for July occurred in the following employment sectors:
? Food services and drinking places added 53,000 jobs in July, and the sector is up by 313,000 jobs for 2017.
? Professional and business services added 49,000 jobs in July, more or less hitting the average jobs added in this sector over the past 12 months.
? Health care employment is up by 39,000 for July, with the biggest gains in ambulatory health care services (30,000) and hospitals (7,000). This sector has added 327,000 jobs over the past 12 months.
? Mining added 1,000 jobs for July, while remaining sectors — construction, manufacturing, whole trade, retail trade, transportation and warehousing, information, financial activities, and government — stayed mostly unchanged that month.
May jobs numbers were revised downward, from 152,000 to 145,000 jobs, but June was revised upwards from 222,000 to 231,000 for a near-zero net change of +2,000 jobs over those two months. Average job growth over the current quarter (May-July) is 195,000 jobs, somewhat better than the 189,000 monthly average so far for 2017.
Overall, these numbers indicate that the economy and the jobs situation continues to improve in the USA, though at a maddeningly slow pace. NPR's report characterized this aptly on this morning's news as "continuing but not spectacular growth."
Turning to Table A-14, and a closer look at the Information sector, here's what we find: While total numbers of unemployed and the corresponding percentage of the sector workforce in that state have declined from 2016 to 2017, the size of the sector is also down (though not by much).
The 2016 numbers are 149,000 unemployed for a 5.7% unemployment rate in information. The 2017 numbers are 111,000 unemployed for a 4.3% unemployment rate information (precisely mirroring the overall number for the month as well). That said, sector size drops from 2.61 million in 2016 to 2.58 million for 2017, indicating somewhere just under 33,000 jobs lost to the sector over the past year.
I'm disappointed to see this number reverse into negative territory, but hopeful that the trend will turn in the other direction soon. Continuing growth in professional and business services, which include IT consultants among those numbers, does help to offset this dip in another sector.
It's also worth remembering the impact of IT workers in sectors not counted in the U.S. Bureau of Labor Statistics Information sector. Tech industry association CompTIA calls this "IT occupation employment" — which means somebody doing an IT job in a non-IT-focused company — rather than "IT sector employment," which means working for a company whose primary focus is IT technology or service delivery.
Overall, we remain stuck in what I've come to call "slow growth mode" since the uptick started back in 2010 and 2011, following the Great Recession of 2008 and 2009. It looks like we're not going anywhere else any time soon, and also like change, if and when it sets in, won't happen quickly.