July jobs report not as dire as reported

John Peacock, with Edward Jones, shared this information on the July jobs report:

The July jobs report brought some much-needed good news for the economy. About 117,000 jobs were added, and the unemployment rate slipped to 9.1%. The report was better than most had expected and helps ease concerns about slowing economic growth. Economists anticipated the unemployment rate to remain at 9.2% and a gain of 85,000 jobs, according to Bloomberg, but the range of estimates was wider than usual. Initial stock market reaction was positive, as many had worried about a weak employment report.

The details of July’s employment report also showed some strength:

  • Private payrolls rose 154,000, in line with the average in 2011.
  • The decline of 37,000 government workers included about 23,000 Minnesota state workers. They were temporarily laid off due to the state government shutdown and have now returned to work.
  • Average earnings rose in July, putting them up 2.3% over the past year.
  • Average hours were unchanged in July but are up slightly over the past year.

Jobs Report Suggests Positive but Sluggish Growth

While the pace of job growth remains slower than most would like — especially those who have faced long-term unemployment — it is improving. The economy created almost 1 million jobs in the first seven months of 2011, about the same number added as in all of 2010. That means the rate of job growth has almost doubled over the past year. In our view, the slow improvement in the employment picture is consistent with overall economic growth that is positive but sluggish, rather than a return to recession.