Labor Market Growth Continues in July but at a Slower Pace Unemployment Drops Further

JOB GROWTH: The pace of job growth slowed in July, although the economy added a healthy 157,000 new jobs. Figures for both May and June were upwardly revised by a total of 59,000 jobs, resulting in an average gain of 224,000 per month over the last three months.

TOP INDUSTRIES: The most significant job gains this past month were seen in professional and business services, manufacturing and healthcare.

UNEMPLOYMENT: After losing a bit of ground last month, the unemployment rate again dropped below 4.0 percent in July to 3.9 percent. Even people hardest hit by the recession are getting back to work in record numbers, with unemployment for those without a high school diploma at its lowest level in decades.

WAGES: Payrolls again edged ahead slightly this past month, although the increase in average hourly earnings remains at 2.7 percent on an annual basis.

WORK WEEK: July saw a slight cutback in the average work week (to 34.5 hours), an action that can effectively boost average hourly pay rates.

TEMPORARY JOB TRENDS: Recording the highest numbers in more than a year, growth in the temporary jobs sector surged to 27,900 new positions in July.

WHAT DOES IT ALL MEAN? There is no question that the economy is firing on almost every cylinder, as evidenced by the upward trajectory on jobs, consumer spending, manufacturing and GDP. Even with slower job growth in July, overall momentum remains strong. Fears about tariffs and trade wars remain, although uncertainty does not appear to have slowed business investment. Companies continue to create new jobs as competition for talent accelerates further. Many job candidates are fielding multiple offers, with the best candidates quickly snapped up. Despite concerns that a wage spike will drive inflation, the big question remains why all this job activity has not spurred greater movement on the salary front.

This newsletter references the BLS Report of July activity, released 8/3/18. 
Sources: U.S. Bureau of Labor Statistics (BLS), Steinberg Employment Research, CNBC, Staffing Industry Analysts, The Wall Street Journal, The New York Times, Fortune, CNNMoney