The U.S. economy added 187,000 jobs in July, below expectations but a slight gain from the downwardly revised June number of +185,000. The labor market continues to cool but remains strong, with more job opportunities than candidates looking for work. With a strong labor market, stable unemployment, and wage gains outpacing inflation, many economists now think the U.S. may see a soft landing and avoid the recession that has been looming for more than a year. The market remains resilient against challenges, including 11 Federal Reserve interest rate hikes to reduce inflation.
The Numbers*:
- The unemployment rate decreased slightly to 3.5%. Since March 2022, the unemployment rate has ranged from 3.4% to 3.7%, with only slight variations month-over-month.
- There were 187,000 jobs added in July.
- Job gains were below the Dow Jones estimate of 200K and the average of +312K jobs over the last twelve months. May job gains were revised down by 25K to 281K. June numbers were revised down by 24K to 185K.
- In July, average hourly earnings rose by 14 cents, or 0.4%, to $33.74. Over the last 12 months, average hourly earnings have increased by 4.4%.
- The average hourly workweek decreased by 0.1 hours to 34.3 hours in July.
- In manufacturing, the workweek remained unchanged at 40.1 hours and an average of 3 hours of overtime.
- The number of job openings decreased to 9.6 M.
- The number of hires and total separations decreased to 5.9M (3.8%) and 5.6M (3.6%).
- Within the separations, quits (3.8M) decreased, layoffs and discharges (1.5M) saw little change. The labor force participation rate remained unchanged for the 5th consecutive month, holding steady at 62.6%, still below the pre-pandemic level.
Industry Trends:
- Health Care had the most significant growth, adding 63K jobs, outpacing the previous 12-month average of 51K. There were also gains in social assistance (+24K), financial activities (+19K), a continuation of Q2 growth after being flat in Q1, and wholesale trade (+18K).
- Construction continued to trend up (+19K), particularly in residential specialty trade contractors and nonresidential building construction. While leisure and hospitality, the leading sector for most of the post-pandemic recovery, continued to slow but from its Q1 average of +67K, adding just 17K jobs.
- In July, declines in employment were seen in manufacturing, motor vehicles, nondurable goods, transportation & warehousing, and temporary help services.
Interesting Changes:
The labor market has grown for 31 straight months but appears to be cooling and settling in near the monthly average of +184K jobs - last seen in the decade before the pandemic and during the last major economic expansion.
With a strong jobs market, a stable unemployment rate, wage gains outpacing unemployment, and an annual inflation rate of 3% -- a 2-year low and three times lower than a year ago -- many economists now think the U.S. may get a “soft landing” and avoid the recession that economists have been warning of for more than a year.
The prime age participation rate (people between 25 and 54) held steady in July, hitting a two-decade high at 83.4%.
Temporary hiring weakened markedly, suggesting that the post-COVID catch-up hiring may be over.
Get the latest Jobs Report:
* Above represents July 2023 Data
Sources:
- https://www.bls.gov/news.release/jolts.nr0.htm
- https://www.bls.gov/news.release/empsit.nr0.htm
- https://www.cnbc.com/2023/08/04/jobs-report-july-2023-187000-jobs-in-july.html
- https://www.cnn.com/2023/08/04/economy/july-jobs-report-final/index.html
- https://www.federalreserve.gov/monetarypolicy/beigebook202307.htm
- https://www.foxbusiness.com/economy/us-jobs-report-july-2023
- https://www.theguardian.com/business/2023/aug/04/us-economy-july-jobs-labor-market
- https://www.washingtonpost.com/business/2023/08/04/july-jobs-unemployment/
- https://finance.yahoo.com/news/jobs-report-august-4-july-2023-123149729.html
