U.S. July Job Numbers Strong for the Second Month
Aug 15, 2016
For the second straight month, job numbers in the U.S. economy were relatively strong, with each above the consensus estimate. Nonfarm payrolls rose by 255,000 in July, extending the gain of 292,000 seen in June. As a result, the country has averaged 273,500 net new workers over the past two months, a decent jump over the 151,000 average seen over the first five months of 2016. This suggests that employers have begun to hire again despite continued cautiousness and lingering weaknesses in the global macroeconomy. The unemployment rate was unchanged at 4.9 percent. Yet, the so-called real unemployment rate – which includes discouraged workers, the underemployed and those working part-time for economic reasons – increased from 9.6 percent to 9.7 percent.
In the manufacturing sector, employers added 9,000 workers in July. This followed an increase of 15,000 in June, and like the nonfarm payroll numbers, it was an encouraging sign. With that said, manufacturing employment has declined by 15,000 on net year-to-date, suggesting that softness in demand and production in the sector have dampened hiring activity of late. Hopefully, employment growth for manufacturers continues to tick higher moving forward – something that is likely to happen if the sector continues to stabilize. Since the end of the Great Recession, manufacturers have added 852,000 workers.
Durable goods firms hired an additional 11,000 employees for the month, with 2,000 fewer workers for nondurable goods businesses. The largest gains were seen in transportation equipment (up 11,500, with 6,700 for motor vehicles and parts), machinery (up 3,300) and nonmetallic mineral products (up 1,200). In contrast, there were notable declines in employment for computer and electronic products (down 3,100), apparel (down 2,500), fabricated metal products (down 1,800) and wood products (down 1,400) manufacturers, among others.
Average weekly earnings in the manufacturing sector edged slightly higher, up from $1,056.98 in June to $1,058.20 in July. On a year-over-year basis, average weekly earnings have increased from $1,029.79 in July 2015, up 2.75 percent for the 12-month period. Average weekly hours in manufacturing were unchanged in July at 40.7 hours, but the average number of overtime hours increased from 3.2 hours to 3.3 hours.