The labor market created 117,000 jobs in July and the unemployment rate fell to 9.1% according to an encouraging BLS report released this morning. This report follows a massive market selloff yesterday that wiped out more than $4.4 trillion from equity values. The report included strong upward revisions: May’s growth was revised upward from 18,000 to 53,000 and June’s job growth was revised up from 25,000 to 46,000.
Private sector payrolls increased by 154,000 in July, driven primarily by a 112,000 gain in private services. Manufacturers added 24,000 reflecting a recovery in the auto industry, which contributed 12,000 of the gain.
Government payrolls continued to decline for the ninth consecutive month, falling by 37,000. This shows that state and local governments continue to lay off workers and cut costs to reduce deficits. Despite this much of this month’s decline in government payrolls can be attributed to the shutdown of the Minnesota government, a temporary situation, that idled around 30,000 workers.
Although the unemployment rate fell to 9.1%, it was much a result of the labor force participation rate falling to a new low of 63.9%
ABA’s Chief Economist James Chessen commented,"These are encouraging numbers and they are right at the 12-month average of 150,000 private sector jobs and above the average of 122,000 private sector job growth since January 2010. However, this pace isn’t enough to bring the unemployment rate down below 9%. It will be a long slow climb and the uncertainty surrounding the market is making businesses think twice about new hires."
Read the report.