Unemployment rate falls to 10.2% and June hires are the second largest monthly increase ever after May 2020

 

Employment Situation Report

On Friday, August 7th, the Employment Situation Report was greeted with cautious optimism when the Department of Labor reported that nonfarm payroll employment rose by 1.8 million in July and the unemployment rate fell to 10.2%. In Friday’s press release, the DOL said that:

“These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In July, notable job gains occurred in leisure and hospitality, government, retail trade, professional and business services, other services, and health care.”

Here are a few more data points released by the DOL:

  • July nonfarm payrolls increased by 1.763 million
  • July private sector payrolls increased by 1.462 million
  • July unemployment rate was 10.2% versus 11.1% in June
  • Persons unemployed for 27 weeks or more accounted for 9.2% of the unemployed versus 7.9% in June
  • The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 16.5%, versus 18.0% in June
  • July average hourly earnings increased 0.2%
  • Over the last 12 months, average hourly earnings have risen 4.8%, versus 4.9% for the 12 months ending in June
  • The average workweek in July was 34.5 hours

 

The JOLTS Report

The Department of Labor also compiles a lesser known report called the Job Openings and Labor Turnover Survey – the JOLTS Report – which tracks monthly changes in job openings as well as job offerings and “quits.” Unlike other reports that track employment data, the JOLTS reporting period lags by a month, although it does provide additional color to the employment landscape.

On Monday, August 11th, it was reported that in June:

  • The number of job openings increased to 5.9 million on the last business day of June
  • Hires decreased to 6.7 million in June but was still the second highest level in the series history. The largest monthly increase in hires occurred in May 2020
  • Total separations increased to 4.8 million. Within separations, the quits rate rose to 1.9 percent while the layoffs and discharges rate was unchanged at 1.4 percent

Further, the DOL reported that:

  • Job openings rose in a number of industries with the largest increases in accommodation and food services (+198,000), other services (+69,000), and arts, entertainment, and recreation (+34,000)
  • Job openings decreased in construction
    (-70,000) and in state and local government education (-26,000). The number of job openings increased in the Northeast and Midwest regions

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