Comments on July Employment Report

The headline jobs number in the July employment report was below expectations, and May and June payrolls were revised down by 29,000 combined.   The participation rate increased, the employment population ratio decreased, and the unemployment rate increased to 4.3%.

Construction employment increased 25 thousand and is now 645 thousand above the pre-pandemic level. 

Manufacturing employment increased 1 thousand and is now 173 thousand above the pre-pandemic level.

Earlier: July Employment Report: 114 thousand Jobs, 4.3% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate increased in July to 84.0% from 83.7% in June to the highest level since 2001.

The 25 to 54 employment population ratio increased to 80.9% from 80.8% the previous month.

Both are above pre-pandemic levels and near the highest level this millennium.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 3.6% YoY in July.   

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons rose by 346,000 to 4.6 million in July. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons increased in July to 4.57 million from 4.22 million in June.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.8 from 7.4% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.535 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.516 million the previous month.

This is down from post-pandemic high of 4.174 million, and up from the recent low of 1.050 million.

This is above pre-pandemic levels.

Job Streak

Through July 2024, the employment report indicated positive job growth for 43 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2019	100
2	1990	48
3	2007	46
4	1979	45
5	20241	43
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline jobs number in the July employment report was below expectations, and May and June payrolls were revised down by 29,000 combined. The participation rate increased, the employment population ratio decreased, and the unemployment rate increased to 4.3%.

A weaker than expected report, and the three-month average employment growth has slowed to 170 per month.  The unemployment rate has increased from a low of 3.4% in early 2023 to 4.3% in July.