U.S. adds 943k jobs in July, unemployment rate down

Total nonfarm payroll employment rose by 943,000 in July, and the unemployment rate declined by 0.5 percentage point to 5.4 percent, the U.S. Bureau of Labor Statistics reported today.

Notable job gains occurred in leisure and hospitality, in local government education, and in professional and business services.

This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics.

The establishment survey measures nonfarm employment, hours, and earnings by industry.

The change in total nonfarm payroll employment for May was revised up by 31,000, from +583,000 to +614,000, and the change for June was revised up by 88,000, from +850,000 to +938,000. With these revisions, employment in May and June combined is 119,000 higher than previously reported.

Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

Household Survey Data

The unemployment rate declined by 0.5 percentage point to 5.4 percent in July, and the number of unemployed persons fell by 782,000 to 8.7 million. 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 (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020).

Among the major worker groups, the unemployment rates declined in July for adult men (5.4 percent), adult women (5.0 percent), Whites (4.8 percent), Blacks (8.2 percent), and Hispanics (6.6 percent).

The jobless rates for teenagers (9.6 percent) and Asians (5.3 percent) showed little change over the month.

Among the unemployed, the number of persons on temporary layoff fell by 572,000 to 1.2 million in July. This measure is down considerably from the high of 18.0 million in April 2020 but is 489,000 above the February 2020 level. The number of permanent job losers declined by 257,000 to 2.9 million in July but is 1.6 million higher than in February 2020.

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 560,000 in July to 3.4 million but is 2.3 million higher than in February 2020.

These long-term unemployed accounted for 39.3 percent of the total unemployed in July. The number of persons jobless less than 5 weeks increased by 276,000 to 2.3 million.

The labor force participation rate was little changed at 61.7 percent in July and has remained within a narrow range of 61.4 percent to 61.7 percent since June 2020. The participation rate is 1.6 percentage points lower than in February 2020.

The employment-population ratio increased by 0.4 percentage point to 58.4 percent in July and is up by 1.0 percentage point since December 2020. However, this measure is 2.7 percentage points below its February 2020 level.

In July, the number of persons employed part-time for economic reasons, at 4.5 million, was about unchanged. There were 4.4 million persons in this category in February 2020.

These individuals, who would have preferred full-time employment, were working part-time because their hours had been reduced or they were unable to find full-time jobs.

In July, the number of persons not in the labor force who currently want a job was 6.5 million, about unchanged over the month but up by 1.5 million since February 2020.

These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.

Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 1.9 million, was little changed in July but is up by 435,000 since February 2020. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey.

The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 507,000 in July, down by 110,000 from the previous month but 106,000 higher than in February 2020.

Household Survey Supplemental Data

In July, 13.2 percent of employed persons teleworked because of the coronavirus pandemic, down from 14.4 percent in the prior month.

These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.

In July, 5.2 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic–that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic.

This measure is down from 6.2 million in June. Among those who reported in July that they were unable to work because of pandemic-related closures or lost business, 9.1 percent received at least some pay from their employer for the hours not worked, little changed from the previous month.

Among those not in the labor force in July, 1.6 million persons were prevented from looking for work due to the pandemic, essentially unchanged from June. To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.

These supplemental data come from questions added to the household survey beginning in May 2020 to help gauge the effects of the pandemic on the labor market.

The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data

Total nonfarm payroll employment rose by 943,000 in July, following a similar increase in June (+938,000). Nonfarm payroll employment in July is up by 16.7 million since April 2020 but is down by 5.7 million, or 3.7 percent, from its pre-pandemic level in February 2020.

In July, notable job gains occurred in leisure and hospitality, in local government education, and in professional and business services.

In July, employment in leisure and hospitality increased by 380,000. Two-thirds of the job gain was in food services and drinking places (+253,000). Employment also continued to increase in accommodation (+74,000) and in arts, entertainment, and recreation (+53,000).

Despite recent growth, employment in leisure and hospitality is down by 1.7 million, or 10.3 percent, from its level in February 2020.

In July, employment rose by 221,000 in local government education and by 40,000 in private education.

Staffing fluctuations in education due to the pandemic have distorted the normal seasonal buildup and layoff patterns, likely contributing to the job gains in July.

Without the typical seasonal employment increases earlier, there were fewer layoffs at the end of the school year, resulting in job gains after seasonal adjustment.

These variations make it more challenging to discern the current employment trends in these education industries. Since February 2020, employment is down by 205,000 in local government education and 207,000 in private education.

Employment in professional and business services rose by 60,000 in July. Within the industry, employment in the professional and technical services component rose by 43,000 over the month and is 121,000 above its February 2020 level.

Professional and technical services include industries such as accounting and bookkeeping services, management and technical consulting services, and scientific research and development services.

By contrast, employment in the administrative and waste services component (which includes temporary help services) changed little over the month (+20,000) and is 577,000 lower than in February 2020.

Employment in the management of companies and enterprises component was also little changed over the month (-3,000) but is 100,000 lower than the level in February 2020.

Employment in professional and business services overall is down by 556,000 since February 2020.

Transportation and warehousing added 50,000 jobs in July. Job growth occurred in transit and ground passenger transportation (+19,000), warehousing and storage (+11,000), and couriers and messengers (+8,000). Employment in transportation and warehousing has grown by 534,000 since April 2020; the industry has recovered 92.9 percent of the jobs lost during the February-April 2020 recession (-575,000).

The other services industry added 39,000 jobs in July, with gains in membership associations and organizations (+17,000) and in personal and laundry services (+15,000).

Employment in other services is 236,000 lower than in February 2020.

Health care added 37,000 jobs in July. Job gains in ambulatory health care services (+32,000) and hospitals (+18,000) more than offset a loss of 13,000 jobs in nursing and residential care facilities. Health care employment is down by 502,000 since February 2020.

Employment in manufacturing increased by 27,000 in July, largely in durable goods manufacturing. Within durable goods, job gains occurred in machinery (+7,000) and miscellaneous durable goods manufacturing (+6,000). Manufacturing employment is 433,000 below its February 2020 level.

Employment in information increased by 24,000 over the month, with three-quarters of the gain in motion picture and sound recording industries (+18,000). Employment in information is down by 172,000 since February 2020.

Employment in financial activities rose by 22,000 over the month, largely in real estate and rental and leasing (+18,000). Employment in financial activities is down by 48,000 since February 2020.

Employment in mining increased by 7,000 in July, reflecting a gain in support activities for mining (+6,000). Mining employment has risen by 49,000 since a trough in August 2020 but is 103,000 below a peak in January 2019.

Employment in retail trade changed little in July (-6,000), following large increases in the prior 2 months. In July, job gains in gasoline stations (+14,000), miscellaneous store retailers (+7,000), and non-store retailers (+5,000) were more than offset by a loss in building material and garden supply stores (-34,000). Since February 2020, employment in retail trade is down by 270,000.

In July, employment showed little change in construction and wholesale trade.

In July, average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents to $30.54, following increases in the prior 3 months. Average hourly earnings for private-sector production and nonsupervisory employees also rose by 11 cents in July to $25.83.

The data for recent months suggest that the rising demand for the labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.

In July, the average workweek for all employees on private nonfarm payrolls was unchanged at 34.8 hours. In manufacturing, the average workweek increased by 0.2 hour to 40.5 hours, and overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours.

The change in total nonfarm payroll employment for May was revised up by 31,000, from +583,000 to +614,000, and the change for June was revised up by 88,000, from +850,000 to +938,000. With these revisions, employment in May and June combined is 119,000 higher than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.