JEFFREY BROWN: Unemployment is down, but job growth still leaves a lot to be desired. That’s the upshot of July’s jobs data from the Labor Department.
The NewsHour’s economics correspondent, Paul Solman, has our story, part of his reporting on Making Sense of Financial News.
PAUL SOLMAN: Today’s report suggested that the economic recovery may be slowing down. Employers added only 162,000 new jobs last month, 23,000 less than economic forecasters’ consensus predication.
The new jobs total was the lowest since March. Moreover, the government revised job growth for May and June, down by 26,000. As for the new jobs, most were in lower-paying industries like retail, hotels, and restaurants. Even though inflation continues to rise, the average hourly wage actually dropped by two cents, the first decline in wages since last October and the most since late 2011.
Overall, the economy has created nearly 200,000 jobs a month since the start of the year. And while those aren’t exactly terrible numbers, they certainly don’t represent robust growth after a deep recession, especially if the working age population grows by 200,000 a month, as it did in July.
As Heidi Shierholz of the Economic Policy Institute points out, even at 200,000 a month, it will take much longer than many people realize to reduce unemployment decisively.
HEIDI SHIERHOLZ, Economic Policy Institute: If we continue with that pace of job growth going forward, we get a little less than 200,000 jobs a month, every single month, indefinitely, we won’t fill the jobs gap for another five years.
PAUL SOLMAN: Today’s announcement came on the heels of another lackluster report that showed the U.S. economy grew only slightly last quarter, gross domestic product up an indolent 1.7 percent.
Today’s best news was that the unemployment rate slid to 7.4 percent from 7.6 percent, marking a four-and-a-half year low. That’s partly due to workers finding new opportunities in an improving labor market. But some of that decline can be attributed to the shrinking size of the work force, as more baby boomers, 10,000 of them a day reaching the full Social Security age of 66, and, says Shierholz, there’s another reason the unemployment rate has been dropping.
HEIDI SHIERHOLZ: The unemployment rate right now is vastly overstating the improvement in the labor market, in the recovery, because we have so many workers who have dropped out of the labor force, or never entered it because job opportunities are so weak.
PAUL SOLMAN: Job opportunities as especially weak in manufacturing, which showed no job growth in July. Factory jobs have remained at a standstill for a year now. And the numbers for both long-term unemployment and part-time workers looking for full-time jobs remained unchanged last month.