Gregory Heym is Chief Economist at Brown Harris Stevens. His weekly series, The Line, covers new developments to the economy, including trends and forecasts. Read on for the latest report and subscribe here to receive The Line in your inbox.
The U.S. added 943,000 jobs in July, easily beating the 845,000 Dow Jones forecast.
Here are the highlights of the Bureau of Labor Statistics report (Spoiler alert: They are all awesome.)
It was the most jobs added since August 2020.
Both May and June’s employment gains were revised higher.
The unemployment rate fell from 5.9% to 5.4%.
The U-6 unemployment rate, which includes discouraged workers and those working part-time for economic reasons, fell from 9.8% to 9.2%. A year ago, this rate was 16.5%.
Average hourly earnings rose more than expected and were 4% higher than a year ago.
This report is about as positive as it gets, with jobs and wages rising while unemployment falls. With over 9 million job openings in the U.S., it was only a matter of time until hiring and wages took off. But we must curb our enthusiasm a bit, because the surveys for this report were conducted before the Delta variant led some local governments to re-impose mask mandates and other restrictions. Many companies have announced vaccination requirements for workers to return to their offices, which, along with more restrictions, may hurt job growth in the next few months.
That said, I’m still optimistic that strong hiring will continue. Yes, the future is uncertain and a bit scary, but we’ve been overcoming scary COVID-19-related things for over a year now.
Continuing Unemployment Claims Fall to Pandemic-Era Law
Initial jobless claims fell to 385,000 last week, their lowest level since the week ending June 5. Continuing claims, which trail by one week, were the real story in this report. They fell to 2.93 million, their lowest level since March 14, 2020.