The June jobs gains was revised up as well, to 938,000 positions added, showing the recovery’s strong pace over the summer.
Since May 2020, America has added back 16.7 million jobs. But it’s still 5.7 million short of its pre-pandemic level.
Still a long way to go
The hospitality and leisure industries — decimated by lockdown measures last year — were once again the biggest contributors of job gains, accounting for more than a third of the total. Some 253,000 jobs were added in restaurants and bars alone last month.
While the rampant growth is great news, the industry is still down 1.7 million jobs since February last year.
Average hourly earnings rose for the fourth month in a row, adding 11 cents to $30.54, as the high demand for workers is pressuring companies to pay more to attract staff.
The jobless rate fell to its lowest level since the pandemic started, declining across nearly all demographic groups counted in the survey.
The unemployment rate for Black teenagers jumped by four percentage points to 13.3%.
The labor force participation rate inched up to 61.7%, while the employment-population ratio increased to 58.4%. Both measures are still below their February 2020 level.
“The stagnant participation rate confirms that there are millions of potential workers who are still outside the labor force, not currently looking for work and therefore not counted among the unemployed,” said Cailin Birch, global economist at The Economist Intelligence Unit.
That said, nearly a million people found work in July, and that’s a good sign for both the jobs recovery and consumer spending, which the US economy needs to grow, Birch said.
The pandemic recovery has been defined by a mismatch between businesses’ demand for staff and workers’ ability and willingness to go back out there amid childcare issues, virus fears and generous benefits.
Fed implication and Delta risk
For the Federal Reserve, which has been touting that it needs to see more improvements in the labor market before adjusting its policies, the July jobs numbers are just what the doctor ordered.
Correspondingly, the US stock market was mixed Friday as investors digested the good economic news along with the possible policy implications.
So far, the increased virus spread from Delta has not weighed on the jobs data much, but that could change in the next reports.