Jobs numbers exceeded expectations for the third month in a row. 1.8 million jobs were added to the U.S. economy in July – beating expectations by nearly 300,000 jobs – and unemployment dropped to 10.2%. It has now taken just three months to add 9.3 million jobs during the COVID-19 economic recovery, an encouraging sign for the great American comeback.
July Employment Situation Report
Job Gains Continued to Surge, Beating Expectations for the Third Month in a Row
- Total nonfarm payroll employment rose by 1.8 million in July, exceeding market expectations of a 1.5 million gain.
- The total job gains over the past 3 months (May – July) have beaten the market’s expectations by a combined 12 million jobs.
- Nonfarm employment has risen 9.3 million over the past three months. As a frame of reference, after employment reached a trough in 2010 following the Great Recession, it took well over 4 years to add 9 million jobs.
- Jobs for low-waged workers increased greatly, with the largest gains in leisure and hospitality (+592,000) and retail trade (+258,000).
- Employment in manufacturing (+26,000) and construction (+20,000) also increased.
- Indicating pent-up demand, average weekly hours in the manufacturing sector increased by a strong 0.7 hours.
- Job gains since April represent a recovery of 42 percent of jobs lost in March and April.
- At the peak in April, 23.1 million people were unemployed compared to the July level of 16.3 million – representing a reduction of 29.2 percent (or 6.7 million people) over those three months.
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Americans Return to Work as Unemployment Falls
- The unemployment rate decreased 0.9 percentage points to 10.2 percent in July, beating expectations.
- All demographic groups saw unemployment rates decrease:
- Hispanics (-1.6 p.p. to 12.9%), Asians (-1.8 p.p. to 12.0%), Blacks (-0.8 p.p. to 14.6%), those without a high school education (-1.2 p.p. to 15.4%), those with only a high school education (-1.3 p.p. to 10.8%), teenagers (-3.9 p.p. to 19.3%).
- African American employment increased by 234,000 in July. Combined with May and June’s gains, this represents an increase of 921,000 over the past three months.
- The labor force participation rate for African Americans also increased by 0.2 percentage point.
- This July, nearly 1.4 million more workers were classified as employed but not at work for “other reasons” than the average of the July values for the prior four years. Classifying these workers as unemployed would raise July’s unemployment rate to 11.1 percent, still a decline from 12.3 percent in June.
- The total number of unemployed persons has decreased by 6.7 million people—or 29.2 percent—over the past 3 months from the April peak.
- In July, 59.8 percent of the unemployed were likely temporary job losers, 3.8 percentage points lower than the share in June.
- The labor force participation rate remained relatively unchanged, ticking down 0.1 percentage point to 61.4 percent, but the employment-to-population ratio increased 0.5 percentage points to 55.1 percent.
- Reentrants to the labor force who are unemployed remained elevated at 2.4 million in July, 564,000 above their level in July 2019, showing workers’ confidence in their ability to find a job.