About 187,000 jobs were added to the U.S. economy in July, below expectations, while the unemployment rate was basically flat at 3.5%, according to the U.S. Bureau of Labor Statistics.
The unemployment rate has ranged from 3.4% to 3.7% since March 2022.
Job gains occurred in healthcare, social assistance, financial activities, and wholesale trade.
The labor force participation rate was basically flat at 62.6% – where it has been hovering for five consecutive months.
The construction sector added 19,000 jobs in June, in line with the average monthly gain of 17,000 in the prior 12 months.
Over the month, job growth occurred in residential specialty trade contractors (+13,000) and in nonresidential building construction (+11,000).
“Employment in this interest-rate sensitive sector continued to trend up in July,” says Ksenia Potapov, economist for First American, in a statement. “Residential construction is defying expectations, largely because of how little housing supply is available for sale.
“Residential building construction employment was flat year over year in July, while non-residential was up by 5.9 percent,” Potapov says. “Compared with pre-pandemic levels, residential building employment is up 10 percent, while non-residential building is up 3 percent.
“Like June, the fastest monthly growth came from residential specialty trade contractors,” Potapov adds. “This sub-sector comprises establishments whose primary activity is performing specific activities, such as pouring concrete, site preparation, plumbing, painting and electrical work.
“As existing homeowners remain rate-locked into their homes with no financial incentive to move, they are likely to increasingly turn to renovating their homes to suit their evolving needs,” she adds.
Wages continued to increase in July, as the average hourly wage for all employees on private nonfarm payrolls rose by 14 cents, or 0.4%, to $33.74.
Over the past 12 months, average hourly earnings have increased by 4.4%, according to the BLS.
In July, average hourly earnings of private-sector production and nonsupervisory employees rose by 13 cents, or 0.5%, to $28.96.
“July’s jobs report shows us what we already knew – the labor market is cooling, but doing so very slowly,” Potapov says. “Employment gains are slowing, yet wages are still growing quickly. The pace of cooling may accelerate following the latest Fed hike, but it is too early to tell.”
Photo: Marten Bjork