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Hiring Heats Up In July, But Not Enough To Keep The Unemployment Rate From Rising
July 26, 2012
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Although employers added 163,000 jobs in July, on average, the economy has created just 105,000 jobs per month since February; about a third less than the 166,000 average monthly jobs created over the same period during the “jobless recovery” of 2004. The relatively weak job growth in July brought the unemployment rate to 8.3 percent and the broadest measure of under-employment rose to 15.0 percent, its highest level since January. Both the labor force participation rate and the employment rate decreased in July and remain at 30-year lows. Over the past year, more people have dropped out of the labor force (2.0 million) than have gained jobs (1.8 million). Moreover, the number of people who are employed part-time for economic reasons has increased by 574,000 since March, compared to a 382,000 increase in payroll jobs. In July, seven industries accounted for almost 80 percent of the job growth:
Restaurants and bars (29,000);
Manufacturing (25,000, but seasonal adjustment issue with autos)
Professional and technical services (18,000);
Education services (18,000);
Employment services/temporary help (14,000);
Health care (12,000); and
Government (-9,000) and utilities (-8,000, labor-management issue) had the largest declines. Most other major industry sectors were either unchanged or had small increases. According to Mark Wilson, principal of Applied Economic Strategies, "despite the July increase, over the past five months the average monthly gain has only been 105,000 compared to 205,000 in the previous five months. Clearly, employers are being very cautious about hiring."
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