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“July jobs report: Economy added back 1.763 million payrolls in July, unemployment rate fell to 10.2%.
The US economy regained fewer jobs in July after a record gain in June, as a resurgence of coronavirus cases in some states earlier this summer weighed on the labor market recovery. However, the number of jobs added topped estimates, and the unemployment rate fell more than expected.
The Department of Labor’s July jobs report was released at 8:30 a.m. ET Friday. Here were the main metrics in the report, compared to consensus estimates compiled by Bloomberg:
- Change in non-farm payrolls: +1.783 million vs.+1.48 million expected and +4.791 million in June
- Unemployment rate: 10.2% vs.10.6% expected and 11.1% in June
- Average hourly earnings, month over month: +0.2% vs. -0.5% expected and -1.3% in June
- Average hourly earnings, year over year: +4.8%vs.+4.2% expected and +4.9% in June
The change in total non-farm payrolls for June was revised down slightly by 9,000 to 4.791 million, while May’s payrolls were revised up by 26,000 to 2.725 million.
Contracts on the three major US stock indices pared overnight losses after the better-than-expected July print was released.
July marked the third straight month that the economy added jobs on net. However, even with the past several months of gains, the economy has not made up the entirety of the lost jobs since the start of the pandemic – especially after April’s record drop of more than 20 million payrolls.
In July, the number of unemployed individuals on temporary layoffs fell by 1.3 million to 9.2 million. That was half of April’s level, as Americans began returning to work following temporary virus-related business closures. However, the number of permanent job losers held steady in July over the prior month at 2.9 million, underscoring the longer-lasting impact to the labor market due to the pandemic.
The services sector again led non-farm payroll gains in July, after the services economy was cut deeply by shelter in place orders and business closures earlier on this year. The leisure and hospitality industry added back 592,000 jobs after gaining nearly 2 million in June, and retail trade jobs increased by 258,000 in July after a rise of more than 800,000 during the prior month.
Within services, information-related industries were the only group to shed jobs on net in July, losing 15,000. Within the goods-producing sector, mining and logging jobs fell by 7,000.
Government jobs rose by 301,000 in July, after an increase of 54,000 in June.
Elsewhere, the jobless rate improved by a greater than expected margin to 10.2% in July from 11.1% in June. However, the unemployment rate remained above the the Global Financial Crisis peak of 10.0%, and more than double the 3.5% rate from February before the spread of the pandemic in the U.S.
Average hourly wages unexpectedly rose on a month over month basis by 0.2%, following a revised 1.3% decline in June. Consensus economists had expected to see average hourly earnings moderate and decline 0.5% on a monthly basis, due to compositional effects as low-wage workers reentered the workforce following shutdowns.”
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