Economy Added 943,000 Jobs In July, Unemployment Rate Falls To 5.4%

The economy added 943,000 jobs in July, a strong sign of recovery, as the unemployment rate fell to 5.4%.

The robust numbers countered renewed concerns over an uptick in Covid cases due to the Delta variant and large segments of the population still unvaccinated. Companies already have delayed plans to bring their employees back to the office in September. That’s also when enhanced unemployment benefits are due to expire.

But the numbers from the Bureau of Labor Statistics exceeded expectations, with job gains especially notable in leisure and hospitality, local government education and professional and business services.

The unemployment rate fell by a half of a percentage point, but the labor force participation rate was largely unchanged, at 61.7%, and it is still lower than in February, 2020, before the pandemic forced massive closures, social distancing and other measures around the country. Leisure and hospitality, a sector severely affected by layoffs during the Covid crisis, added 380,000 jobs, but was still down by 1.7 million jobs from the February, 2020 level. Of the growth in that sector, some 53,000 jobs came from arts, entertainment and recreation, reflecting reopenings of live venues and theaters.

Production also showed an uptick, as motion picture and sound recording added 18,000 jobs, once again showing the impact of the need for content following last year’s shutdowns.

Average hourly earnings on private nonfarm payrolls rose by 11 cents to $30.54 during the month.

The jobs numbers for May and June, meanwhile, were revised upward, bringing the average growth over the past three months to 832,000.

Jason Furman, who was chairman of the Council of Economic Advisers under President Barack Obama, tweeted that he had “yet to find a blemish in this jobs report. I’ve never before seen such a wonderful set of economic data.”

He added, “Still a long way to go: we’re about 7.5 million jobs short of where we should have been right now absent the pandemic. But we’ve made a lot of progress. But is it “a lot” coming close to ‘substantial’? The Fed will be deciding that.”

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