U.S. gains 209K jobs, jobless rate falls to 4.3%
Eight years after the end of the last recession, the U.S. economy has by another measure returned to employment levels from before the downturn.
The better-than-estimated 209,000 payroll gain in July was more than enough to close what the Hamilton Project calls the “jobs gap.” The measure, which adjusts for growth and aging of the population, accounts for total employment and what’s needed to absorb the number of new labor-market entrants, according to the economics offshoot of the Brookings Institution.
“It’s sort of a mark of healing of the labor market,” said Diane Whitmore Schanzenbach, the outgoing director of the Hamilton Project. “That doesn’t mean we’re at full employment or anything like that, and I think everybody’s worried about wage growth, but this is one marker of healing.”
The Hamilton Project’s measure is an attempt to parse how much the labor market has improved cyclically.
While it took eight years for the jobs gap to close in this expansion, it never did in the previous one that began in 2001. Because the employment-to-population ratio was turning lower before the last recession that started in December 2007, there was a lower hurdle to clear this time around, the project’s authors wrote.
With the July payrolls gain, employment in 2017 has averaged 184,000, in line with 187,000 last year. At the same time, wage growth has remained sluggish, rising at a 2.5 percent year-on-year rate in July that matches the average of the past two years.
Still, the hiring data points to a healthy economy despite some mixed signals in recent weeks. Employers appear to be optimistic about their businesses and future consumer demand. The solid job gains may also fuel greater consumer spending, which would bolster economic growth.
“The July jobs report is solid from top to bottom — with the caveat that wage growth, while stronger than expected, remains subdued,” Andrew Hollenhorst, an economist at Citi.
President Donald Trump celebrated the report in a tweet shortly after the numbers were released. “Excellent Jobs Numbers,” he wrote, “and I have only just begun.”
Yet the pace of hiring so far this year is pretty much the same as it was last year under Trump’s predecessor, Barack Obama. Employers have added 184,000 jobs a month this year, compared with 187,000 in 2016. Monthly job gains topped 200,000 on average in 2014 and 2015.
Hiring was particularly strong in restaurants and bars, which added 53,100 jobs. Education and health care, which includes both higher-paying and lower-paying jobs, gained 54,000.
Manufacturers added a solid 16,000 jobs. Professional and business services, which includes mostly higher-paying jobs such as engineers, accountants and architects, added 49,000.
Retail jobs were mostly unchanged, as brick and mortar shops continue to struggle. Yet transportation and warehousing, which has been boosted in recent years by the rapid growth of e-commerce, also barely added jobs.
The solid job market is also reflected in recent corporate moves. Amazon held a nationwide “hiring day” Wednesday in an effort to fill 50,000 jobs. And Trump has highlighted announcements by Taiwanese manufacturer Foxconn and carmakers Toyota and Mazda to open plants in the U.S.
Other recent economic reports had sent mixed signals. Americans are buying homes at a healthy pace, but car sales have fallen off. Factory production is expanding modestly, but a report Thursday pointed to slower growth among services firms, such as retailers, banks and construction companies. Consumers also turned cautious in June and barely raised their spending compared with May.
The economy expanded at a healthy 2.6 percent annual pace in the April-June quarter, up from an anemic 1.2 percent in the first three months of the year. Still, that leaves the growth at about 2 percent in the first half of the year, the same modest pace of growth the U.S. has experienced since the Great Recession.
Bloomberg News and The Associated Press contributed.
Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.