The official jobs report is out today and 209,000 jobs were added in July. Economists had expected 233,000 jobs. However, the totals for May and June were revised upwards by 15,000 over what was reported at the time. July is likely to be revised next month since that has been the trend over the past year. Despite adding 209,000 new jobs, the unemployment rate ticked up from 6.1 percent to 6.2 percent.
In July, 197,000 jobs were added in the private sector. Local governments added 12,000 jobs as part of a shift of programs from the federal government to local taxpayers due to sequestration. The Postal Service continued to cut employment, shedding 1,400 jobs last month. The federal and state governments added no new jobs.
Although spin will be put on these numbers one way or the other, 209,000 jobs is the average monthly gain over the last year. That means the economy continues to improve at the same pace. Everyone would like to see that pace increased, but there are a lot of factors preventing the economy and job growth from taking off. Uncertainty over conflicts around the globe is one; the other is the dysfunction and lack of performance by the Congress of the United States, particularly the House of Representatives.
One bright spot in the report is the strong increase in manufacturing jobs. Manufacturing added 28,000 jobs in July. These gains were in motor vehicles and parts, which hired an additional 15,000, and in furniture and related products which increased employment by 3,000. Over the prior 12 months, manufacturing had added an average of 12,000 jobs per month, primarily in durable goods industries. This is an indicator of a growing economy.
Another strong industry was construction. Employment increased by 22,000 in July. Within the industry, employment continued to trend up in residential building and in residential specialty trade contractors. Over the year, construction has added 211,000 jobs.
As good as the construction numbers were they were kept down by uncertainty over whether the highway trust fund would go broke today. Congress knew last year it would run out of money in August but it did nothing about it until yesterday. They put a band aid on the hemorrhage, funding highways until next May keeping the uncertainty over the fall and winter. States and local governments could not start projects this spring because the fund was going broke. As a result, two thirds of the construction season is lost due to the do-nothing Congress. Thousands of jobs could have been added.
The social assistance sector added 18,000 jobs over the month and 110,000 over the year. (The social assistance industry includes child day care and services for the elderly and persons with disabilities.) Some of this is attributed to the growing number of baby boomers requiring assistance. Some is due to the growing population of veterans requiring assistance after a decade of wars.
Employment in health care changed little with job gains in ambulatory health care services, which added 21,000 jobs. These were largely offset by losses in hospitals which were down 7,000, and nursing care facilities which cut back 6,000 positions. This trend is not due to the economy, it is do to changes in how health care is delivered. Because more people, particularly low-income people, now have insurance, they used emergency rooms less for routine health care. Many seniors are receiving care at home, not in hospitals or nursing homes.
Professional and business services added 47,000 jobs in July and has added 648,000 jobs over the past 12 months. In July, retail trade employment rose by 27,000 led by hiring by automobile dealers, food and beverage stores, and general merchandise stores. Over the past year, retail trade has added 298,000 jobs.
Mining added 8,000 jobs in July, with the bulk of the increase occurring in fracking which added 6,000 jobs. Over the year employment in this sector has risen by 46,000. Employment in leisure and hospitality changed little in July but has added 375,000 jobs over the year, primarily in food services and drinking places.
The July numbers could have been so much better if Congress spent more time governing, and less time in political posturing and brinkmanship.