US Payrolls Add Robust 528k in July with 471k in New Private Jobs

US July nonfarm payrolls rose by 528,000 (consensus 250,000) with June’s a revised 372K new jobs. June unemployment rate was 3.5% (consensus 3.6%), versus 3.6% in June and slightly above before the pandemic became widespread in the U.S. in February 2020. Wages grew 5.2% on the year, down from 5.2% in June. In the face of surging inflation June average hourly earnings rose 0.5% (consensus 0.3%) The change in private payrolls +471K, more than the +230K expected.

Working

July 2022 US Employment Report

The jobless rate fell to at 3.5% the Labor Department reported Friday. The unemployment rate is now at the February 2020 pre-pandemic rate of 3.5%, which was a 50-year low.

The market had expected the July report released Friday to show nonfarm payrolls rise 250k new jobs which it beat with 522k new jobs.  Employers added an average of nearly 400,000 workers over the previous three months, keeping the job market on strong footing.

US Jobs Report

Employers hired across industries. Companies in certain industries that are vulnerable to interest-rate increases, such as technology and real estate, have announced layoffs. Some firms have implemented hiring freezes.

The labor force participation rate, which measures the share of the population working or looking for work rose to 62.3% in May from 62.2% a month earlier and was well above its trough of 60.2% in April 2020. Participation was still down from 63.4% in February 2020.

A severe labor shortage has driven up annual wage increases above 5% every month of this year. By contrast, wage gains averaged 3.2% in the 12 months to February 2020.

Total nonfarm employment has increased by 22.0 million since hitting a trough in April 2020 and has returned to the pre-pandemic level. Private-sector employment is 629K higher than in February 2020, although several sectors have yet to recover. On the other hand, government employment is still 597K lower than its pre-pandemic level.

July 2022 US Employment Report and Expectations

  • 8:30 ET: July Nonfarm Payrolls (consensus 250,000; prior 372,000), Nonfarm Private Payrolls (consensus 200,000; prior 381,000), Average Hourly Earnings (consensus 0.3%; prior 0.3%), Unemployment Rate (consensus 3.6%; prior 3.6%), and Average Workweek (consensus 34.5; prior 34.5)

Employment

  • US Change in Nonfarm Payrolls Jul: 528K (est 250K; prev 384K)
  • US Unemployment Rate Jul: 3.5% (est 3.6%; prev 3.6%)
  • US Labour Force Participation Rate Jul: 62.1% (est 62.2%; prev 62.2%)
  • Two-month net revision +28K, change in total nonfarm payroll employment for May was revised up by 2,000, from +384,000 to +386,000, change for June was revised up by 26,000, from +372,000 to +398,000. With these revisions, employment in May and June combined is 28,000 higher than previously reported.
  • Private Payrolls Jul: 471K (est 230K; prev 381K)
  • US Manufacturing Payrolls Jul: 30K (est 20K; prev 29K)
  • Change in Government Payrolls June +57K (prev -9K)
  • U6 underemployment rate 6.7% vs 6.7% prior
  • Long-term unemployed at 1.1m vs (prev 1.4m, 1.2m pre-pandemic)
  • The employment-population ratio 59.9% vs (prev 60.1%, 61.2% before pandemic)
  • US Average Hourly Earnings (M/M) Jul: 0.5% (est 0.3%; prev 0.3%)
  • US Average Hourly Earnings (Y/Y) Jul: 5.2% (est 4.9%; prev 5.1%)
  • US Average Weekly Hours All Employees Jul: 34.6 (est 34.5; prev 34.5)

The unemployment rate and number of unemployed persons prior to the coronavirus (COVID-19) pandemic was 3.5 percent and 5.7 million, respectively, in February 2020)

United States Unemployment Rate
United States Non Farm Payrolls
United States Non Farm Payrolls

Where the Jobs Were:

Job gains were widespread. In June, 7.1 percent of employed persons teleworked because of the coronavirus pandemic, down from 7.4 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the pandemic.

Largest gains occurring in:

  • Leisure and hospitality (96K), particularly in food services and drinking places (74K)
  • Professional and business services (89K), including management of companies and enterprises (13K), architectural and engineering services (13K),
  • Management and technical consulting services (12K), and scientific research and development services (10K)
  • Health care (70K)

That leaves the economy down by 1.2 million jobs, or 0.8 percent, from its pre-pandemic level in February 2020.

Labour shortages continue to weigh even after federal government-funded unemployment benefits have expired and schools reopened. Some investors believe such shortages could get worse due to the White House’s vaccine mandate.

Private Jobs

United States Nonfarm Payrolls - Private

Government Jobs

 

United States Government Payrolls

Manufacturing Jobs

United States Manufacturing Payrolls

 

 Wages Monthly

United States Average Hourly Earnings MoM

Wages Yearly

United States Average Hourly Earnings YoY

 Hours

United States Average Weekly Hours

 


May Employment Reports


Household Survey Data  

In July, the unemployment rate edged down to 3.5 percent, and the number of unemployed persons
edged down to 5.7 million. These measures have returned to their levels in February 2020, prior to the
coronavirus (COVID-19) pandemic

Among the major worker groups, the unemployment rates for adult women (3.1 percent) and Whites
(3.1 percent) declined in July. The jobless rates for adult men (3.2 percent), teenagers (11.5 percent),
Blacks (6.0 percent), Asians (2.6 percent), and Hispanics (3.9 percent) showed little change over the
month.

Among the unemployed, the number of permanent job losers, at 1.2 million in July, continued to trend
down over the month and is 129,000 lower than in February 2020. The number of persons on
temporary layoff, at 791,000 in July, changed little from the prior month and has essentially returned to
its pre-pandemic level.

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 269,000 in
July to 1.1 million. This measure has returned to its February 2020 level. The long-term unemployed
accounted for 18.9 percent of the total unemployed in July. (See table A-12.)
The labor force participation rate, at 62.1 percent, and the employment-population ratio, at 60.0
percent, were little changed over the month. Both measures remain below their February 2020 values
(63.4 percent and 61.2 percent, respectively).

The number of persons employed part time for economic reasons increased by 303,000 to 3.9 million
in July. This rise reflected an increase in the number of persons whose hours were cut due to slack work
or business conditions. The number of persons employed part time for economic reasons is below its
February 2020 level of 4.4 million. 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 not in the labor force who currently want a job was 5.9 million in July, little
changed over the month. This measure is above its February 2020 level of 5.0 million. These individuals
were not counted as unemployed because they were not actively looking for work during the 4 weeks
preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of persons marginally attached to
the labor force, at 1.5 million, was about unchanged in July. These individuals wanted and were
available for work and had looked for a job sometime in the prior 12 months but had not looked for
work in the 4 weeks preceding the survey. Discouraged workers, a subset of the marginally attached
who believed that no jobs were available for them, numbered 424,000 in July, little changed from the
prior month. (See Summary table A.)


Household Survey Supplemental Data

In July, 7.1 percent of employed persons teleworked because of the coronavirus pandemic,
unchanged from the prior month. These data refer to employed persons who teleworked or worked at
home for pay at some point in the 4 weeks preceding the survey specifically because of the pandemic.

In July, 2.2 million persons reported that they had been unable to work because their employer closed
or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some
point in the 4 weeks preceding the survey due to the pandemic. This measure is little changed from the
previous month. Among those who reported in July that they were unable to work because of pandemic related closures or lost business, 25.0 percent received at least some pay from their employer for the hours not worked, little different from the previous month.

Among those not in the labor force in July, 548,000 persons were prevented from looking for work
due to the pandemic, little changed from the prior month. (To be counted as unemployed, by definition,
individuals must be either actively looking for work or on temporary layoff.)

These supplemental data come from questions added to the household survey beginning in May 2020 to
help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables
with estimates from the supplemental questions for all months are available online at
www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm


Establishment Survey Data

Total nonfarm payroll employment rose by 528,000 in July, larger than the average monthly gain
over the prior 4 months (+388,000). Job growth was widespread in July, led by gains in leisure and
hospitality, professional and business services, and health care. (See table B-1.)

Total nonfarm employment has increased by 22.0 million since reaching a low in April 2020 and has
returned to its pre-pandemic level. Private-sector employment is 629,000 higher than in February 2020,
although several sectors have yet to recover. Government employment is 597,000 lower than its pre pandemic level.

In July, leisure and hospitality added 96,000 jobs, as growth continued in food services and
drinking places (+74,000). However, employment in leisure and hospitality is below its February
2020 level by 1.2 million, or 7.1 percent.

Employment in professional and business services continued to grow, with an increase of 89,000 in
July. Job growth was widespread within the industry, including gains in management of companies
and enterprises (+13,000), architectural and engineering services (+13,000), management and
technical consulting services (+12,000), and scientific research and development services (+10,000).
Employment in professional and business services is 986,000 higher than in February 2020.

Employment in health care rose by 70,000 in July. Job gains occurred in ambulatory health care
services (+47,000), hospitals (+13,000), and nursing and residential care facilities (+9,000).
Employment in health care overall is below its February 2020 level by 78,000, or 0.5 percent.

Employment in government rose by 57,000 in July but is below its February 2020 level by 597,000, or
2.6 percent. Over the month, employment increased by 37,000 in local government, mostly in education
(+27,000). Employment in local government is below its February 2020 level by 555,000, or 3.8
percent, with the losses split between the education and non-education components.

Employment in construction increased by 32,000 in July, as specialty trade contractors added 22,000
jobs. Construction employment is 82,000 higher than in February 2020.

Manufacturing employment increased by 30,000 in July. Employment in durable goods industries rose
by 21,000, with job gains in semiconductors and electronic components (+4,000) and miscellaneous
durable goods manufacturing (+4,000). Employment in manufacturing is 41,000 above its February
2020 level.

In July, social assistance added 27,000 jobs, including a gain of 19,000 in individual and family
services. Since February 2020, employment in social assistance is down by 53,000, or 1.2 percent.
Employment in retail trade increased by 22,000 in July, although it has shown no net change since
March. In July, job gains occurred in food and beverage stores (+9,000) and general merchandise stores
(+8,000). Retail trade employment is 208,000 above its level in February 2020.

In July, transportation and warehousing added 21,000 jobs. Employment rose in air transportation
(+7,000) and support activities for transportation (+6,000). Employment in transportation and
warehousing is 745,000 above its February 2020 level

Information employment continued its upward trend in July (+13,000) and is 117,000 higher than in
February 2020.

Employment in financial activities continued to trend up in July (+13,000). Employment in the industry
is 95,000 above its level in February 2020.

Employment in mining rose by 7,000 in July, with gains in support activities for mining (+4,000) and
oil and gas extraction (+2,000). Mining employment is 96,000 above a recent low in February 2021.
Employment showed little change over the month in wholesale trade and in other services.


Earnings

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 15 cents, or 0.5
percent, to $32.27. Over the past 12 months, average hourly earnings have increased by 5.2 percent. In
July, average hourly earnings of private-sector production and nonsupervisory employees rose by 11
cents, or 0.4 percent, to $27.57.

In July, the average workweek for all employees on private nonfarm payrolls was 34.6 hours for the
fifth month in a row. In manufacturing, the average workweek for all employees held at 40.4 hours,
and overtime increased by 0.1 hour to 3.3 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls remained unchanged at 34.0 hours.

The change in total nonfarm payroll employment for May was revised up by 2,000, from +384,000 to
+386,000, and the change for June was revised up by 26,000, from +372,000 to +398,000. With these
revisions, employment in May and June combined is 28,000 higher than previously reported.
(Monthly revisions result from additional reports received from businesses and government agencies
since the last published estimates and from the recalculation of seasonal factors.


The Employment Situation for August is scheduled to be released on Friday, September 2, 2022, at
8:30 a.m. (ET).


Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TradersCommunity News Desk