Job Creation, Wage Growth and Participation Beat Forecasts in July
The U.S. economy added 163,000 jobs in July, wages grew by a faster pace and labor force participation ticked up to 63.0%. The increase in job-seekers kept the unemployment rate at 3.7% (chart).
However, the July jobs report marks the seventeenth straight month unemployment rate was at or below 4%. The number of long-term unemployed — or, those jobless for 27 weeks or more — fell by 248,000
to 1.2 million.
That’s the lowest number since June 2007.
|Indicator||Prior||Revised||Consensus Forecast||Forecast Range||Actual|
|Nonfarm Payrolls – M/M ∆||224,000||193,000||151,000||140,000 to 170,000||164,000|
|Unemployment Rate||3.7 %||3.6 %||3.6 % to 3.7 %||3.7 %|
|Private Payrolls – M/M ∆||191,000||179,000||160,000||150,000 to 165,000||148,000|
|Manufacturing Payrolls – M/M ∆||17,000||12,000||5,000||-5,000 to 10,000||16,000|
|Participation Rate – level||62.9 %||63.0 %|
|Average Hourly Earnings – M/M ∆||0.2 %||0.3 %||0.2 %||0.2 % to 0.3 %||0.3 %|
|Average Hourly Earnings – Y/Y ∆||3.1 %||3.1 %||3.1 % to 3.2 %||3.2 %|
|Avg Workweek – All Employees||34.4 hrs||34.4 hrs||34.4 hrs to 34.5 hrs||34.3 hrs|
“This is a solid jobs report and although there are some modest downside revisions in the prior 2 months, the strength of the June report gave us a nice cushion to absorb those revisions,” Tim Anderson, analyst at TJM Investments said. “While the average workweek and overtime both declined by 0.1 hours, the labor force participation rate was the strongest internal metric of the report.”
The increase in the labor force participation rate was driven largely by African Americans, which rose significantly from 61.9% to 62.7%. It’s the second consecutive monthly gain for participation.
Manufacturing added 16,000 jobs in July after gaining by 12,000 in June. Employment gains in the manufacturing industry have averaged 22,000 per month in 2018.
Wage growth has exceeded 3% for twelve straight months.
Average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $27.98, after another 8-cent increase in June. Over the past 12 months, average hourly earnings have risen by 3.2%.
“With a 3.2% year-over-year increase, wage growth has now been at or exceeded 3.0% for an entire year,” Acting U.S. Secretary of Labor Patrick Pizzella said in a statement. “America’s workers are taking home more money in their paychecks, which is great news for families and our economy.”
In July, average hourly earnings of private-sector production and nonsupervisory employees rose by 4 cents to $23.46.