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Economy in Brief

U.S. Payroll Employment Gain Eases; Jobless Rate Holds Steady
by Tom Moeller  August 7, 2015

Nonfarm payroll employment during July increased 215,000 (2.1% y/y) following upwardly revised increases of 231,000 and 260,000 in June and May. The latest increase fell a little short of expectations for 221,000 in the Action Economics Forecast Survey. Improvement in services employment continued to lead the increase in jobs. The unemployment rate held steady at 5.3%, as expected. The overall unemployment rate, including marginally attached and those working part-time for economic reasons, eased m/m to 10.4%, down from 12.2% one year ago. Average hourly earnings matched expectations with a 0.2% rise (2.1% y/y).

From the payroll employment survey, the 215,000 jobs rise was the weakest in three months. The three-month average gain of 235,000 was, however, the firmest rise since February. Factory sector employment improved 15,000 (1.2% y/y), the strongest gain in six months. Construction employment, however, improved just 6,000, well off December's pace of 44,000. Mining jobs were reduced by 4,900 (-7.9% y/y), the seventh straight month of decline. Private service sector jobs rose 193,000 (2.6% y/y). Professional & business services employment gained a lessened 40,000 (3.6% y/y) but temporary help jobs declined 8,900 (4.5% y/y), the first decline since February. Education & health services jobs improved 37,000 (2.8% y/y), the weakest rise this year. Retail employment grew 35,900 (2.0% y/y), on a par with the prior three months. Leisure & hospitality jobs advanced 30,000 (3.0% y/y) after a 24,000 increase while employment in financial activities improved 17,000 (2.0% y/y). Wholesale sector employment rose 6,300 (1.4% y/y). Employment in the public sector continued weak with a 5,000 rise (0.4% y/y). Local government employment increased 8,000 (0.3% y/y) and jobs in the federal sector were unchanged (0.6% y/y). State government employment fell 3,000 (+0.5% y/y).

The average workweek notched up to 34.6 hours after holding at 34.5 hours last quarter. The latest level matched the highest point since all of 2007. As a result, aggregate hours worked strengthened 0.5% (2.7% y/y), the most for any month since November 2013.

Average hourly earnings in the private sector improved 0.2%. That left the three-month change at 0.1%, on a par with the weakest growth of the economic expansion. Slower growth has been prevalent across industry sectors.

From the household employment survey, the unemployment rate of 5.3% left it at the lowest level since April 2008. It reflected a 101,000 rise (1.7% y/y) in employment and a 69,000 increase (0.7% y/y) in the labor force. The labor force participation rate of 62.6% was down from its high of 67.1%, averaged from 1997 to 2000. The number of eligible workers not in the labor force grew 2.0% y/y.

The average teenage unemployment rate eased sharply to 16.2%, its lowest point since April 2008. For adult men it averaged 4.8%, a 7-year low, and for adult women it ticked up to 4.9%, also near the 7-year low. The average duration of unemployment ticked up to 28.3 weeks, but still well off the 2012 high of 39.4 weeks.

The unemployment rate amongst individuals with less than a high school diploma averaged 8.3% while for high school graduates with no college, it was 5.5%. For those without a college degree, the mean unemployment rate was 4.4% and for those with a bachelors degree or higher, it was 2.6%.

The labor market data is contained Haver's USECON database. Detailed figures are in the EMPL and LABOR databases. The expectations figure is in the AS1REPNA database.

Employment: (SA M/M Change, 000s) Jul Jun May Y/Y 2014 2013 2012
Payroll Employment 215 231 260 2.1% 1.9% 1.7% 1.7%
 Previous -- 223 254 -- -- -- --
 Manufacturing 15 2 6 1.2 1.4 0.8 1.7
 Construction 6 0 12 3.5 4.8 3.7 2.1
 Private Service Producing 193 220 254 2.6 2.2 2.2 2.2
 Government 5 4 8 0.4 0.0 -0.3 -0.8
Average Weekly Hours - Private Sector 34.6 34.5 34.5 34.5
(Jul.'14)
34.5 34.5 34.4
Private Sector Average Hourly Earnings (%) 0.2 -0.0 0.2 2.1 2.1 2.1 1.9
Unemployment Rate (%) 5.3 5.3 5.5 6.2s
(Jul.'14)
6.1 7.4 8.1
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