US Adds 943,000 Jobs in July, Bringing Unemployment Down to 5.4%
The U.S. added 943,000 jobs in July, beating estimates, while the unemployment rate declined to 5.4% — gains mostly driven by the leisure and hospitality industry, local government education and professional and business services.
Economists surveyed by The Wall Street Journal were expecting 845,000 new jobs in July and unemployment to be between 5.7% to 5.9%, according to MarketWatch.
“The number of unemployed persons fell by 782,000 to 8.7 million,” the Labor Department said in the release. “These measures are down considerably from their highs at the end of the February-April 2020 recession. However, they remain well above their levels prior to the coronavirus pandemic (3.5% and 5.7 million, respectively, in February 2020).”
Sheraz Iftikhar, President and CEO of Arch Global Advisors, tells GOBankingRates that data suggests that the labor market in previous months was adding jobs in industries that offer low wages, such as restaurants and tourism.
“The recent show in increase in wages can be an indication that high-paying jobs are being added and even though the labor market is still weaker than pre-pandemic level, it is heading in the right direction,” he says.
In terms of sectors, in July, employment in leisure and hospitality increased by 380,000, with two-thirds of the job gain was food services and drinking places.
Despite recent growth, employment in leisure and hospitality is down by 1.7 million, or 10.3% from its level in February 2020.
Employment rose by 221,000 in local government education and by 40,000 in private education. Since February 2020, employment is down by 205,000 in local government education and 207,000 in private education.
In addition, employment in professional and business services rose by 60,000 in July.
Andrew Hunter, co-founder of job search engine Adzuna, tells GOBankingRates that while employers are hiring urgently right now, there is still hesitance among some job seekers to re-enter the workforce or take on new roles due to the surge in Delta cases.
“As many as nine million Americans are hesitant to return to work due to concerns around the rising Delta variant, leading to lower than usual employment levels despite the glut of jobs on offer,” he says. “The jobs market is currently off-balance, but we’re seeing positive early signs of jobseekers flooding back to the market.”
“Looking ahead to autumn, the winding up of stimulus checks coupled with more certainty around COVID should rebalance the scales and create a much healthier market.”
Among the major worker groups, the unemployment rates declined in July for adult men, at 5.4% and for adult women at 5%.
While the rates declined for all the following groups, minorities continue to be the most affected with whites at 4.8%; Blacks at 8.2% and Hispanics at 6.6%. The jobless rates for teenagers, 9.6% and Asians 5.3%, showed little change over the month.
“Moving forward, I expect the job market hiring trend will continue its upward trajectory and unemployment rates will hopefully level out to pre-COVID numbers,” Lisa Balter Saacks, Chief Revenue Officer at Chimney Vigor Group, tells GOBankingRates.
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