Comments on the employment report for the month of July

by Calculated risk on 05/08/2022 10:38:00 AM

Today we celebrate the recovery of all jobs lost in 2020, and the unemployment rate matches the lowest level since 1969.

The number of key jobs in the July employment report was well above expectations, and employment in the past two months was revised up by 28,000, combined. The participation rate has decreased slightly, and the employment-to-population ratio has increased slightly. The unemployment rate fell to 3.5%.

Leisure and hospitality added 96,000 jobs in July. At the start of the pandemic, in March and April of 2020, leisure and hospitality lost 8.20 million jobs, and is now down by 1.21 million jobs since February 2020. Therefore, leisure and hospitality has now restored about 85% of all jobs lost in March and April 2020.

Employment in the construction sector increased by 32K and is now 82K above the pre-pandemic level.

Manufacturing added 30,000 jobs and is now 41,000 jobs higher than the pre-pandemic level.

Earlier: July employment report: 528 thousand jobs, 3.5% unemployment rate

In July, the annual change in employment was 6.15 million jobs.

Main Participant (from 25 to 54 years old)

Since the overall participation rate has declined due to cyclicality (stagnation) and demographic reasons (aging population, young people staying in school), here’s the employment-to-population ratio for the main working age group: 25 to 54.

The participation rate increased from 25 to 54 in July to 82.4% from 82.3% in June, and the proportion of the working population increased from 25 to 54 to 80.0% from 79.8% in the previous month.

Both are just below pre-pandemic levels and indicate the return of nearly all workers of adulthood to the workforce.

Part time for economic reasons

part time workersFrom the BLS report:

The number of part-time workers for economic reasons increased by 303,000 to 3.9 million in July. This rise reflects an increase in the number of people whose working hours are interrupted due to stagnant work or working conditions. The number of people working part-time for economic reasons is below its February 2020 level of 4.4 million. Those individuals, who would have preferred to work full time, were working part time because their working hours had been cut back or they could not find full time jobs.

The number of people working part-time for economic reasons in July rose to 3.924 million from 3.621 million in June. This is below pre-recession levels.

These workers are included in the proxy measure of underutilization (U-6) which is unchanged at 6.7% from 6.7% in the previous month. This is down from the April record high of 22.9% for this measure since 1994. This measure is down from 7.0% in February 2020 (pre-pandemic).

Unemployed for more than 26 weeks

Unemployed for more than 26 weeksThis graph shows the number of unemployed workers for 27 weeks or more.

According to the BLS, 1.067 million workers have been out of work for more than 26 weeks and still want a job, down from 1.336 million in the previous month.

This is back to its lowest levels before the pandemic.

Summary:

The number of major monthly jobs was well above expectations and employment in the past two months was revised up by 28,000, combined.

The headline unemployment rate fell to 3.5%, matching its lowest level in more than 50 years.

Overall, this was another solid employment report.

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