The U.S. economy added 528,000 jobs in July – much stronger than expected – while the unemployment rate edged down to 3.5%, according to the U.S. Bureau of Labor Statistics.
Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care.
The unemployment rate as of July had dropped to pre-pandemic levels, the BLS says. The total number of unemployed persons edged down to 5.7 million.
The number of long-term unemployed – those jobless for 27 weeks or more – as of the end of July stood at 1.1 million, a decrease of about 269,000 compared with June.
The labor force participation rate, at 62.1%, was little changed compared with June.
In July, leisure and hospitality added 96,000 jobs, as growth continued in food services and drinking places (+74,000).
However, employment in leisure and hospitality is below its February 2020 level by 1.2 million, or 7.1%.
Wages continued to increase In July – albeit at nowhere near the rate of inflation. Average hourly earnings for all employees on private nonfarm payrolls rose by 15 cents, or 0.5%.
“Total nonfarm payroll employment rose by 528,000 in July, far exceeding consensus expectations of 250,000,” says Odeta Kushi, deputy chief economist for First American, in a statement. “The unemployment rate edged down to 3.5 percent. As of July, all of the 22 million jobs lost in the pandemic have been regained.”
“The prime-age labor force participation rate increased slightly to 82.4 percent, up from 82.3 percent,” Kushi adds. “That participation rate has been struggling to regain momentum in recent months. The pre-pandemic rate was approximately 83 percent.”
Kushi notes that it was a “strong jobs month for specialty trade contractors, adding 22,000 jobs.”
“While homebuilder confidence plunged in July as builders grapple with a slowing housing market and ongoing supply-side headwinds, you need more hammers at work to build and renovate homes,” Kushi says.
”Residential building construction employment increased by 2,900 in July while nonresidential picked up by 4,900,” she says. “Residential building employment is up 7.5 percent compared to pre-pandemic, while nonresidential building employment remains 4.7 percent below.”
