US Unemployment Drops Slightly; Job Growth Slows

Eileen GuzmanAug 05, 2018

Mornings with Maria panel on the July jobs report and the state of the US job market. Overall, the USA unemployment rate inched down to 3.9% in July, following an increase in June, with total employment increasing by 157,000 jobs.

And the underemployment rate - which includes discouraged workers no longer searching for work, as well as involuntary part-time workers - dropped to 7.5 percent, the lowest in 17 years, from 7.8 percent. Transportation, mining and financial services did not hire much in July.

Experts blamed some of the change on closing retail stores, but said the labor market remains tight, with more openings than jobs overall. There are about 6.6 million unfilled jobs in the country.

"It is incredible that at this point in a recovery you are seeing growth that is on average faster than the previous two years", she reportedly said.

Neil Dutta, an economist at Renaissance Macro, said following Friday's report that, "The important point is that there is no sign of overheating but that aggregate wages and salaries (jobs x hours x earnings) are growing at a brisk pace". Below that was outpatient care centers, adding 4,300 jobs.

The government also revised hiring totals for May and June to show that another 59,000 jobs were added in those months.

Professionals from both the executive search and talent management sectors weighed in on what they are seeing not only in the US but other parts of the globe as well.

But workers' average hourly paychecks grew tepidly from the previous month and are up just 2.7 percent compared to the same time past year. Politically sensitive trade gaps with China, Mexico and Canada all increased, potentially setting the stage for even more sabre-rattling tweets from President Trump. That kept the annual increase in wages at 2.7% in July.

Homebuyers are encountering higher mortgage rates, one reason that the housing market has been faltering lately even as other economic indicators like hiring have remained strong, as evidenced by the upward revisions for May and June.

That means the economy is still producing strong payroll gains, averaging 215,000 net new jobs a month, the best since 2015.

Construction boosted jobs by 19,000 following a 13,000 gain. Service-providing sectors grew by 177,000 jobs, with health care/social assistance gaining the most with 49,000 jobs.

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