US economy adds 164,000 new hires; unemployment rate stays at 3.7%
Friday, August 02, 2019
In July, U.S. payrolls added 164,000 workers versus job gains of 224,000 in June, as the unemployment rate stayed at 3.7%, according to the Bureau of Labor Statistics. There were 6.1 million unemployed workers in July, close to the same number as June.
The jobless rates for men, women, blacks, Hispanics, whites, adults and teens changed little in July from June. The rate of unemployment for Asians rose from 2.1% in June to 2.8% in July.
The number of long-term unemployed persons decreased 248,000 in July from June. The employment-to-population ratio rate stayed nearly the same in July versus June, the BLS reported.
For workers on nonfarm private payrolls, the weekly hours of work in July dipped to 34.3 hours compared with June’s 34.4 hours. In July, the manufacturing sector’s average workweek declined 0.3 of an hour to 40.4 hours, while overtime dropped 0.2 of an hour to 3.2 hours.
Wages rose. "Over the past 12 months, average hourly earnings have increased by 3.2 percent," the BLS reported. "In July, average hourly earnings of private-sector production and nonsupervisory employees rose by 4 cents to $23.46."
Small business hiring (payrolls of 1-49 employees) rose 11,000 in July after falling by 23,000 in June, according to the ADP National Employment Report.
Midsize employers (50-499 employees) hired 67,000 new workers in July after adding 60,000 employees in June. Hiring at large firms (500 or more workers) led the way in July with employers adding 78,000 workers versus 65,000 in June.
The ADP National Employment Report comes from ADP’s nonfarm private sector payroll data representing 411,000 U.S. clients and nearly 24 million employees (out of a 157 million in the labor force), published in alliance with Moody's Analytics.
According to the ADP/Moody’s report, the service-providing sector hired 146,000 new workers in July versus 117,000 in June. Payrolls in the goods-producing sector gained 9,000 jobs in July after losing 15,000 jobs in June. Manufacturing firms gained 1,000 new hires in July after adding 7,000 in June.
Mark Zandi is chief economist at Moody’s Analytics. "Small businesses are suffering the brunt of the slowdown," he said in a statement, "Hampering job growth are labor shortages, layoffs at bricks-and-mortar retailers, and fallout from weaker global trade."
The trade war between China and the U.S. is a headwind on economic growth. For example, U.S. gross domestic product growth, a comprehensive measure of economic activity, fell to 2.1% for the second quarter of 2019 versus 3.1% for the first quarter of the year.
In response to the slowing GDP gains, the Federal Reserve Bank cut short-term interest rates by a quarter-point on July 31. Decreasing the price to borrow can spur economic growth.
Craig Allen, president of the U.S.-China Business Council, weighed in on the 12th round of U.S.-China bilateral trade negotiations in Shanghai that recently ended.
"We hope the negotiators will continue to take a pragmatic and realistic approach to compromise and reach a conclusion that leads to greater market access for foreign companies," he said in a statement, "improves the protection and enforcement of intellectual property, and ultimately levels the playing field for foreign companies operating in the market."
Later, President Trump threatened via Twitter to impose new tariffs on Chinese goods. These new levies could take effect on Sept. 1.
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