July jobs report beats expectations, unemployment rate hits 16-year low
Friday - 04/08/2017 09:39
The jobs report is out and it’s a beat.
In July, the U.S. economy added 209,000 jobs, more than the 180,000 expected by economists. The 222,000 jobs added in June were revised up to 231,000.
Over the last three months, job gains have averaged 195,000 per month.
In July, the unemployment rate fell to 4.3% as expected, matching the 16-year low also seen back in May of this year.
Shortly after the report’s release, President Donald Trump tweeted about the report, saying “Excellent Jobs Numbers just released – and I have only just begun.”
Wages in July were also a bit better than expected, as month-on-month gains came in in-line with expectations and year-on-year gains topped expectations. Wages rose 0.3% over the prior month and 2.5% over last year.
Expectations were for wages to rise 0.3% month-on-month and 2.4% over the prior year. Many economists have expected that with the unemployment rate now within shouting distance of 4% we’d see more acceleration in aggregate wage gains.
Following the release of the report, stock futures were higher with the Dow up about 60 points, S&P 500 futures were up 3 points, and the Nasdaq was up 9 points.
In July, the underemployment rate (also known as the U-6 unemployment rate), which includes those out of work and those working part-time but who would like to have full-time work, stood at 8.6%, unchanged from June.
In a note to clients following the report, Michael Pearce, U.S. economist at Capital Economics, said the underemployment rate suggests there is still some “spare capacity” in the labor market. At the peak of the last labor market cycle in 2007, this rate hit 7.9%.
This number has gotten more attention in recent months as resident Trump’s chief economic advisor Gary Cohn has mentioned bringing down this figure as a particular point of emphasis for the administration.
The labor force participation rate rose by 0.1% in July, ticking up to 62.9%.
By industry, job gains were concentrated in the services sector with leisure and hospitality employment rising by 62,000 in July while the education and health services industry added 54,000 jobs. Professional and business services jobs rose by 49,000 in July.
Overall, 22,000 jobs were added to the goods-producing sector, with 16,000 jobs added in manufacturing and 6,000 added in construction.
More to come …
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland