US Unemployment Rate Falls to 7.4 Percent, a New Low for Recovery; Economy Gains 162,000 New Jobs
The latest data released by the Bureau of Labor Statistics show the US labor market continuing to recover. The unemployment rate fell to 7.4 percent, a new low for the recovery. Payroll jobs increased by a moderate 162,000, as shown in the following chart. May and June job gains were revised downward.
Payroll job increases were concentrated in service sectors, with retail trade, leisure and hospitality, and business services all showing strong growth. Goods producing industries gained slightly, with job losses in construction more than offset by gains in manufacturing. The government sector showed a rare increase in jobs, most of them in at the local level. Federal and state governments employed fewer workers in July. As the following chart shows, the long decline in total government employment appears to be tapering off.
The household survey on which the BLS bases the unemployment rate showed a gain of 227,000 jobs in July. Unlike the establishment survey of payroll jobs, the household survey includes self-employed and part-time workers. The number of unemployed decreased by 263,000 in July, while the civilian labor force decreased by just 37,000, bringing the unemployment rate down from 7.6 percent in June to 7.4 percent in July.
The BLS also publishes an alternative measure of unemployment, U-6, which takes into account involuntary part-time employment, discouraged workers, and other workers who are marginally attached to the labor force. U-6 fell from 14.3 percent in June to 14.0 percent in July, a little higher than its low for the recovery, reached earlier this year. The next chart shows both the standard and broad unemployment rates.
On the whole, although it is hardly brilliant, today’s report on the employment situation for July confirms the moderate forward momentum shown by the Q2 GDP data released earlier in the week.
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